The Film Shoppe is a video rental and retail chain. The Shoppe is forecasting its financial statements for Year 2. Selected financial information for Years 1 and 2 is provided in the table. In Year 2 The Shoppe is planning to invest $600 million in CAPEX and forecasted depreciation is $903 million. What is Net Property, Plant and Equipment in Year 2? Selected Financial Information
The Film Shoppe Inc. ($ millions)
$$\begin{array} { | c | c | c | }
\hline & \text { Year 1 } & \text { Year 2 } \
\hline \text { PP\&E } & \$ 15,622 & \
\hline \text { Depreciation } & 884 & 903 \
\hline \text { CAPEX } & 1,343 & 600 \
\hline
\end{array}$$

Question

The Film Shoppe is a video rental and retail chain. The Shoppe is forecasting its financial statements for Year 2. Selected financial information for Years 1 and 2 is provided in the table. In Year 2 The Shoppe is planning to invest $600 million in CAPEX and forecasted depreciation is $903 million. What is Net Property, Plant and Equipment in Year 2? Selected Financial Information
The Film Shoppe Inc. ($ millions)
$$\begin{array} { | c | c | c | } 
\hline & \text { Year 1 } & \text { Year 2 } \
\hline \text { PP\&E } & \$ 15,622 & \
\hline \text { Depreciation } & 884 & 903 \
\hline \text { CAPEX } & 1,343 & 600 \
\hline
\end{array}$$

Quizplus · Accepted Answer

Net Property, Plant, and Equipment (PP&E) for Year 2 is calculated as: Year 1 PP&E + Year 2 CAPEX - Year 2 Depreciation = $15,622 + $600 - $903 = $15,319 million.

The Film Shoppe Is a Video Rental and Retail Chain