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Please comment:
1. assignment says
Oundjian Corp. recently sold inventory for $92,600. The goods had originally cost $65,800. Inflation during the period was 5%. The goods could be replaced from their long-time supplier for $75,600. For simplicity, assume that there are no other costs of doing business.. I calculated the nominal dollar as $26800, constant $ 23,510 and physical cap maint $ 17,000.
I think this is correct, but please since I'm trying to undertand this correctly comment.
2. Now the next question asks "
Assume in each case in requirement 1 that the company collected revenue in cash and paid out 100% of net income in dividends to owners. Calculate the remaining cash balance" but I don't understand the question. If 100% is paid out to the owners how can there be anything left and would all numbers (nominald, constant and physical) be $ 0 ?
3. Calculate nominal dollar:
"At the beginning of 20X5, its first year of business, Marsalis Ltd. invested $40,000. in inventory and $200,000 in equipment. Total sales were $100,000. Of the initial inventory purchases, $16,000 remained in inventory at the end of the period. Leflore depreciated the equipment by 20% straight-line, taking a full year’s depreciation in 20X5.
The replacement cost of the inventory, both that sold and that remaining in year-end inventory, had decreased by 10% by the end of the year. The replacement cost of the equipment, however, had increased by 3% over the year."
My answer is -$16,000
4. Calculate Physical capital maintenance, my answer -$ 15,600
I want to understand this concept thoroughly, I have studied the text and I understand the principals but when doing these assignments I have questions as: if inventory at the end of the year is depreciated, do we start to depreciate the beginning capital as well BEFORE we calculate the rest, etc. so please comment.
1. assignment says
Oundjian Corp. recently sold inventory for $92,600. The goods had originally cost $65,800. Inflation during the period was 5%. The goods could be replaced from their long-time supplier for $75,600. For simplicity, assume that there are no other costs of doing business.. I calculated the nominal dollar as $26800, constant $ 23,510 and physical cap maint $ 17,000.
I think this is correct, but please since I'm trying to undertand this correctly comment.
2. Now the next question asks "
Assume in each case in requirement 1 that the company collected revenue in cash and paid out 100% of net income in dividends to owners. Calculate the remaining cash balance" but I don't understand the question. If 100% is paid out to the owners how can there be anything left and would all numbers (nominald, constant and physical) be $ 0 ?
3. Calculate nominal dollar:
"At the beginning of 20X5, its first year of business, Marsalis Ltd. invested $40,000. in inventory and $200,000 in equipment. Total sales were $100,000. Of the initial inventory purchases, $16,000 remained in inventory at the end of the period. Leflore depreciated the equipment by 20% straight-line, taking a full year’s depreciation in 20X5.
The replacement cost of the inventory, both that sold and that remaining in year-end inventory, had decreased by 10% by the end of the year. The replacement cost of the equipment, however, had increased by 3% over the year."
My answer is -$16,000
4. Calculate Physical capital maintenance, my answer -$ 15,600
I want to understand this concept thoroughly, I have studied the text and I understand the principals but when doing these assignments I have questions as: if inventory at the end of the year is depreciated, do we start to depreciate the beginning capital as well BEFORE we calculate the rest, etc. so please comment.