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 20152016 $5,000 $5,100 1, 800 1,900 610 340 590 Revenue Cost of goods sold Depreciation 590 290 540 280 s60 280 450 ed Administrative expenses 200 Federal and state caxes Accounts payable Accounts receivable Net fixed aaseta Long-cerm debt Notes payable Dividends paid Cash and marketable securities se0 350 500 5,700 6,350 1,500 1,890 560 360 340 990 360 850 Taxes are paid in their entirety in the year that the tax obligation is incurred 1 Net fixed assets are fixed assets net of accumulated depreclation 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

Depreciation in 2016 = 610

Net fixed assets in 2015 = 5,700

Net fixed assets in 2016 = 6,350

Net fixed assets in 2016 = Net fixed assets in 2015 + Gross investments in 2016 – Depreciation in 2016

$6,350 = $5,700 + Gross investments in 2016 - $610

Gross investments in 2016 = $6,350 - $5,700 + $610 = $1,260

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