Question
i need assistance with the formula
2020 2019 $ 740 Sales $ 785 COGS 430 440 Interest 33 40 Dividends 16 Depreciation Cash Accounts receivables Current liabiliti
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Answer #1

Solution :

The Net capital spending is calculated using the formula :

Net Capital Spending = Closing Fixed Assets - Opening Fixed Assets + Depreciation

As per the information given in the question we have

Closing Fixed Assets = Asset balance of 2020 = $ 1,413 ;

Opening Fixed Assets = Asset balance of 2019 = $ 1,680 ; Depreciation in 2020 = $ 210

Applying the above information in the formula we have Net capital spending as

= $ 1,413 - $ 1,680 + $ 210

= - $ 57

Thus the Net capital spending for 2020 = - $ 57

The solution is Option E. - $ 57

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