Challenge 24. Net Fixed Assets and Depreciation (L03) On the statement of tinancial position, the net fixed assets (NFA) account is equal to Questions the gross fixed assets (FA) account (which records the acquisition cost of fixed assets) minus the accumulated depreciation (AD) 24-36) 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, NFAnd - NFA +D (where D is the depreciation expense during the year), is equivalent to FA -FA Use the following information for Clarington Inc. for Problems 25 and 26 (assume the tax rate is 34 percent): 2011 2012 Sales $7,233 58,085 Depreciation 1,038 1,085 Cost of goods sold 2,487 2,942 Other expenses 515 Interest 485 579 Cash 3,972 4,041 Accounts receivable 5,021 5,892 Short-term notes payable 717 Long-term debt 12,700 15,435 Net fixed assets 31,805 33,291 Accounts payable 3,984 4,025 Inventory 8,927 9,555 Dividends 882 1,011 591 732 Challenge 24. Net Fixed Assets and Depreciation (L03) On the statement of tinancial position, the net fixed assets (NFA) account is equal to Questions the gross fixed assets (FA) account (which records the acquisition cost of fixed assets) minus the accumulated depreciation (AD) 24-36) 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, NFAnd - NFA +D (where D is the depreciation expense during the year), is equivalent to FA -FA Use the following information for Clarington Inc. for Problems 25 and 26 (assume the tax rate is 34 percent): 2011 2012 Sales $7,233 58,085 Depreciation 1,038 1,085 Cost of goods sold 2,487 2,942 Other expenses 515 Interest 485 579 Cash 3,972 4,041 Accounts receivable 5,021 5,892 Short-term notes payable 717 Long-term debt 12,700 15,435 Net fixed assets 31,805 33,291 Accounts payable 3,984 4,025 Inventory 8,927 9,555 Dividends 882 1,011 591 732