The table below contains data on Fincorp Inc. The balance sheet items correspond

Question

The table below contains data on Fincorp Inc. The balance sheet items correspond to values at year-end 2015 and 2016, while the income statement items correspond to revenues or expenses during the year ending in either 2015 or 2016. All values are in thousands of dollars 2015 2016 $5,000 $5,100 1, 800 1,900 610 340 590 280 se0 350 500 Revenue Cost of goods sold Depreciation 590 290 540 280 s60 280 450 ed Administrative expenses Intereat expense Federal and state caxea Accounts payable Accounts receivable Net fixed aaset Long-cerm debt Notes payable Dividends paid Cash and marketable securities 5,700 6,350 1, 500 ,890 560 360 340 990 360 850 Taxes are paid in their entirety in the year that the tax obligation is incurresd 1 Net fixed assets are fixed assets net of accumulated depreciation since the asset was installed. Examine the values for depreciation in 2016 and net fixed assets in 2015 and 2016. What was Fincorp's gross investment in plant and equipment during 2016? (Enter your answer in dollars, not thousands of dollars.) Gross investment in plant and equipment

Explanation / Answer

Difference in Net fixed assets (NFA) = NFA in 2016 - NFA in 2015 = 6350 - 5700 = 650

But NFA are arrived at after charging for depreciation from gross fixed assets.

Therefore, Gross investment in plant and equipment in 2016 = Difference in NFA + Depreciation in 2016 = 650 + 610 = 1260 or 1,260,000

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