Question

Teddy's Pillows has beginning net fixed assets of $600 and ending net fixed assets of $730. Assets valued at $400 were sold during the year. Depreciation was $50. What is the amount of net capital spending

Answer 1

The amount of net capital spending is $ 580.

Step-by-step explanation:

This question requires us to calculate net capital spending. The net capital spending can be calculated using simple accounting rule/equation given below.

Opening balance + Debit = Closing Balance + Credit

The capital spending will be equal to debit in fixed asset account. So now putting values given in the question in equation given above.

Debit (Capital Spending)= 400+50+730-600 = $ 580

Answer 2

$ 180

Step-by-step explanation:

Net capital spending = fixed assets at the end of the year - fixed assets at the beginning of the year + depreciation = $ 730 - $ 600 + $ 50 = $ 180

Net capital spending is the amount a firm used to acquire fixed assets during the year.