The balance sheet of a firm shows beginning next fixed assets of $348,200 and ending net fixed assets of $371,920. The depreciation expense for the year is $40,080 and the interest expense is $11,460. What is the amount of the net capital spending? A) - $22,360B) - $4,780C) $23,720D) $58,340E) $69,800

Question

Business

Carlo Rasmussen

28 January, 19:08

The balance sheet of a firm shows beginning next fixed assets of $348,200 and ending net fixed assets of $371,920. The depreciation expense for the year is $40,080 and the interest expense is $11,460. What is the amount of the net capital spending? A) - $22,360B) - $4,780C) $23,720D) $58,340E) $69,800

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Answers (1)

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Kendra Bender · Answer 1

The amount of the net capital spending is $63,800

Explanation:

The computation of net capital spending is shown below:

Net capital spending = Ending fixed assets - beginning fixed assets + depreciation

= $371,920 - $348,200 + $40,080

= $63,800

We simply take the difference of fixed assets balance and then add the depreciation expenses so that net capital spending could find out.

While computing the net capital spending, we do not consider the interest expense. Therefore, we ignored it