Liabilities: Equity = 1000 Reserve fund = 1000 (10x depreciation)
So balance sheet is not in balance....which mistake am I making here? Can somebody help me out on this?
Problem2: Propose I'm a non-profit organisation and have to invest 1000. I have no own capital and will borrow everything from a bank, repayment at 10 terms. For simplicity interest=0%.
My costprice will be 100 (= yearly depreciation) + 100 repayment of loan = 200 in total. So far so good. But after 10 year a new cycle starts: At that time I have repaid my loan and also a reserve fund of 1000! Therefore my cost price is 100 (Þpreciation).
So since my costprice was set at 200 I will make a big profit (or not). Therefore: what is the real cost-price in this example?
I hope that some of you can help me with these questions!