Question

Logano Driving School’s 2017 balance sheet showed net fixed assets of $4.5 million, and the 2018 balance sheet showed net fixed assets of $6.5 million. The company's 2018 income statement showed a depreciation expense of $975,000. What was net capital spending for 2018?

Answer 1

Ending net fixed assets=Beginning net fixed assets+net capital spending-Depreciation expense

6,500,000=4,500,000+net capital spending-975,000

net capital spending=6,500,000+975,000-4,500,000

=$2,975,000