The amount of Net Fixed Assets (NFA) as of 12/31/2020 is _____________
Understand the Problem
The question is asking to calculate the Net Fixed Assets (NFA) as of December 31, 2020, based on the financial data provided in the Income Statement and Balance Sheets for the years ending 2019 and 2020. The approach will be to summarize the gross fixed assets and subtract the accumulated depreciation for the year 2020 to arrive at the NFA.
Answer
The equation for Net Fixed Assets is $NFA = GFA_{2020} - AD_{2020}$.
Answer for screen readers
The final answer for the Net Fixed Assets (NFA) as of December 31, 2020, is given by the formula: $$ NFA = GFA_{2020} - AD_{2020} $$
Steps to Solve
- Identify Gross Fixed Assets for 2020
Begin by locating the total gross fixed assets from the Balance Sheet for the year ending December 31, 2020. Let's denote this amount as $GFA_{2020}$.
- Locate Accumulated Depreciation for 2020
Next, find the accumulated depreciation from the Balance Sheet for December 31, 2020. Denote this as $AD_{2020}$.
- Calculate Net Fixed Assets (NFA)
Use the formula to calculate Net Fixed Assets: $$ NFA = GFA_{2020} - AD_{2020} $$ Substituting the values from steps 1 and 2 into this equation will give you the Net Fixed Assets.
- Verify the Calculation
After calculating, it’s essential to double-check the figures for both gross fixed assets and accumulated depreciation to ensure accuracy, and confirm that the subtraction was performed correctly.
The final answer for the Net Fixed Assets (NFA) as of December 31, 2020, is given by the formula: $$ NFA = GFA_{2020} - AD_{2020} $$
More Information
Net Fixed Assets represent the value of a company's fixed assets after accounting for depreciation. This calculation helps in understanding the long-term asset base of a company, which is crucial for assessing its financial health.
Tips
- Not accurately finding the gross fixed assets or accumulated depreciation from the financial statements. Always ensure to use the right figures from the financial reports.
- Mistaking the year when identifying financial data. Make sure to always refer to the correct year's information.
- Errors in subtraction, so always double-check calculations to avoid mistakes.
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