Question

Logano Driving School's 2017 balance sheet showed net fixed assets of $3.4 million, and the 2018 balance sheet showed net fixed assets of $3.9 million. The company's 2018 income statement showed a depreciation expense of $325,000. What was net capital spending for 2018? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) Net capital spending

Answer 1

Net Capital Spending

Net Capital Spending = Increase in Net Fixed Assets + Depreciation Expenses

= [Net Fixed Assets at the year end – Net Fixed Assets at the beginning] + Depreciation Expenses

= [$39,00,000 - $34,00,000] + $325,000

= $500,000 + $325,000

= $825,000

“Therefore, The Net Capital Spending for 2018 = $825,000”