Question

The financial statements of Blue Fin Marina reflect depreciation expenses of $41,600 and interest expenses of $27,900 for the year. The current assets increased by $31,800 and the net fixed assets increased by $28,600. What is the amount of the net capital spending for the year?

Answer 1

Answer:

Net capital spending = 70,200

Explanation:

Net capital spending tells us how much the company has spent on acquiring fixed assets during the year, therefor provides an indication of the growth in the company’s fixed assets.

Net capital spending = Fixed assets at the end of the year – fixed assets at the beginning of the year + depreciation

Net capital spending = Increased or decreased in fixed Assets + depreciation

In Blue Fin Marina´s case:

Net capital spending = Increased or decreased in fixed Assets + depreciation

Net capital spending = 28,600 + 41,600

Net capital spending = 70,200