Southeastern IT Systems has the following balance sheet and the income statement
ID: 2383955 • Letter: S
Question
Southeastern IT Systems has the following balance sheet and the income statement. Make sure the unit is in million dollars.
(unit: $ in millions)
Southeastern IT Systems
Balance Sheets
2013
2014
2013
2014
Cash
$1,000
$1,200
Accounts payable
$800
$850
Accounts receivable
6,500
7,500
Notes payable
7,500
8,000
Inventory
1,500
2,000
Current liabilities
8,300
8,850
Current assets
9,000
10,700
Long-term debt
1,000
1,000
Net fixed assets
3,000
3,500
Common equity
500
500
Retained earnings
2,200
3,850
Total Assets
$12,000
$14,200
Total Liabilities & Owner’s Equity
$12,000
$14,200
Income Statement
2014
Net sales
$15,000
Cost of goods sold
10,000
Depreciation
700
EBIT
4,300
Interest expenses
400
Taxable income
3,900
Taxes
1,365
Net income
$2,535
Dividends
( )
What is the net capital spending (NCS) or the capital expenditure for 2014?
$500
$700
$1,200
$3,000
Southeastern IT Systems
Balance Sheets
2013
2014
2013
2014
Cash
$1,000
$1,200
Accounts payable
$800
$850
Accounts receivable
6,500
7,500
Notes payable
7,500
8,000
Inventory
1,500
2,000
Current liabilities
8,300
8,850
Current assets
9,000
10,700
Long-term debt
1,000
1,000
Net fixed assets
3,000
3,500
Common equity
500
500
Retained earnings
2,200
3,850
Total Assets
$12,000
$14,200
Total Liabilities & Owner’s Equity
$12,000
$14,200
Explanation / Answer
$1200 (3500+700-3000) i.e Closing Fixed Asset balance + Depreciation - Opening Fixed Asset balance
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