Net Fixed Assets and Depreciation (LO3)

On the statement of financial position, the

net fixed assets (NFA) account is equal to the gross fixed assets (FA) account (which

records the acquisition cost of fixed assets) minus the accumulated depreciation (AD)

account (which records the total depreciation taken by the firm against its fixed assets).

Using the fact that NFA = FA AD, show that the expression given in the chapter for

net capital spending, NFAend

NFAbeg

+ D (where D is the depreciation expense

during the year), is equivalent to FAend

FAbeg.

Use the following information for Clarington Inc. for

Problems 24

and

25

(assume the

tax rate is 34 percent):

2014 2015

Sales1157312936

Depriciation16611736

COGS39794707

Other expenses946824

Interest 776926

Cash 60666467

Account recievable80349427

Short terms notes payable11711147

Long term debt2032024696

Net fix asset5088854273

Account payable43844644

Inventory1428315288

Dividends14111618

Calculating Cash Flow (LO3)

For 2015, calculate the cash flow from assets, cash flow to

creditors, and cash flow to shareholders.