At the beginning of 20X5, its first year of business, Marsalis Ltd. invested $43,500 in inventory and $207,000 in equipment. Total sales were $107,000. Of the initial inventory purchases, $19,500 remained in inventory at the end of the period. Marsalis depreciated the equipment by 20% straight-line, taking a full years depreciation in 20X5. The replacement cost of the inventory, both that sold and that remaining in year-end inventory, had decreased by 12% by the end of the year. The replacement cost of the equipment, however, had increased by 2% over the year.

Required:

Determine the net income (using only the costs indicated above), under each of the following assumptions:

1. Nominal dollar capital maintenance

net income:___________

2. Physical capital maintenance

net income:___________