Question

Logano Driving School’s 2017 balance sheet showed net fixed assets of $3.8 million, and the 2018 balance sheet showed net fixed assets of $6.9 million. The company's 2018 income statement showed a depreciation expense of $835,000. What was net capital spending for 2018?

Answer 1

Answer:

$3,935,000

Explanation:

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

6,900,000 = 3,800,000 + Net capital spending - $835,000

Net capital spending = (6,900,000 + $835,000 - 3,800,000)

                                  = $3,935,000

Therefore, the net capital spending for 2018 is $3,935,000.