Question

This year, Amalgamated Industries reported depreciation expense of $145,000 on its income statement while reporting Net Fixed Assets of $260,000 on its balance sheet. Last year, it reported depreciation expense of $105,000 and net fixed assets of $270,000. What was Net Capital Spending this year?

Answer 1

To calculate the Net Capital Spending, subtract the change in Net Fixed Assets from the Depreciation Expense. In this case, the Net Capital Spending is $155,000.

Step-by-step explanation:

To find the Net Capital Spending, we need to subtract the change in Net Fixed Assets from the Depreciation Expense. Net Capital Spending represents the amount of money a company has spent on acquiring or upgrading fixed assets.

The change in Net Fixed Assets can be calculated by subtracting the Net Fixed Assets of the previous year from the Net Fixed Assets of the current year. In this case, the change is $260,000 - $270,000 = -$10,000.

Therefore, the Net Capital Spending this year would be $145,000 - (-$10,000) = $155,000.