At the beginning of this year, Blauser Industries had net fixed assets of $21,506 and total assets of $32,687. At year's end, net fixed assets are $20,492 and total assets are $32,915. The annual depreciation expense is $1,520. What is net capital spending for this year

Question

Business

Melody Kim

30 January, 20:58

At the beginning of this year, Blauser Industries had net fixed assets of $21,506 and total assets of $32,687. At year's end, net fixed assets are $20,492 and total assets are $32,915. The annual depreciation expense is $1,520. What is net capital spending for this year

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Cody Giles · Answer 1

The net capital spending for the year is $506

Explanation:

The Net capital Spending (NCS) is used to show how net fixed assets increased during a business year after depreciation value has been added. It can simply be said to be the amount a firm spends in acquiring extra fixed asset during the year. mathematically it is represented as;

Net beginning fixed asset - net ending fixed asset + depreciation

Note that depreciation, is added back to the net ending fixed asset because, when the net ending fixed asset is determined, depreciation expense is subtracted, to give an actual worth of the property, therefore depreciation is added back to the amounts. In this example;

Net beginning fixed asset = $21,506

Net ending fixed asset = $20,492

depreciation = $1,520

∴ NCS = Net beginning fixed asset - net ending fixed asset + depreciation

NCS = 20,492 - 21,506 + 1,520 = $506