Suppose You Have the Beginning and Ending Year Statement of Financial

question 333

Multiple Choice

Suppose you have the beginning and ending year statement of financial positions of Samco, a steel company based in Hamilton, along with the year's statement of comprehensive income. Changes in net working capital (NWC) would be calculated as:

• A) Ending NWC plus depreciation minus beginning NWC.
• B) Ending NWC minus depreciation minus beginning NWC.
• C) Ending NWC plus taxes paid plus beginning NWC.
• D) Ending NWC minus beginning NWC.
• E) Ending NWC plus beginning NWC.

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Definitions:

Salvage Value

The estimated residual value of an asset at the end of its useful life, often used in calculating depreciation expense.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded over time for tangible assets, reducing their carrying value on the balance sheet.

Salvage Value

The forecasted sell-on value of an asset at the conclusion of its operational period.

Double-Declining Balance

A method of accelerated depreciation where an asset loses value at double the rate of the traditional straight-line depreciation method.