Question

The Play House's December 31, 2013, balance sheet showed net fixed assets of $1,238,000 and the December 31, 2014, balance sheet showed net fixed assets of $1,416,000. The company's 2014 income statement showed a depreciation expense of $214,600. What was the firm's net capital spending for 2014

Answer 1

$392,600

Step-by-step explanation:

Given that,

On December 31, 2013, balance sheet showed net fixed assets = $1,238,000

December 31, 2014, balance sheet showed net fixed assets = $1,416,000

Depreciation expense 2014 = $214,600

Firm's net capital spending for 2014:

= Net fixed assets on December 31, 2014 - Net fixed assets on December 31, 2013 + 2014 Depreciation expense

= $1,416,000 - $1,238,000 + $214,600

= $392,600

Therefore, the firm's net capital spending for 2014 is $392,600.