Question

Micro, Inc., started the year with net fixed assets of $75,300. At the end of the year, there was $96,700 in the same account, and the company's income statement showed depreciation expense of $13,270 for the year. What was the company's net capital spending for the year?

Answer 1

The company's net capital spending for the year is calculated by taking the increase in net fixed assets and adding the depreciation expense, resulting in a total of $34,670.

Step-by-step explanation:

To calculate the net capital spending for the year for Micro, Inc., we take the ending net fixed assets and subtract the starting net fixed assets, then add back the depreciation for the year. The calculation is as follows:

• Ending net fixed assets: $96,700
• Beginning net fixed assets: $75,300
• Depreciation: $13,270

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

Net capital spending = ($96,700 - $75,300) + $13,270

Net capital spending = $21,400 + $13,270

Net capital spending = $34,670

Answer 2

$158,730

Step-by-step explanation:

Mario incoporation started the year with a net fixed assets of $75,300

At the end of the year the net fixed assets was $96,700

The depreciation expense is $13,270

Therefore the company's net capital spending for the year can be calculated as follows

= $96,700+$75,300-$13,270

= $172,000 - $13,270

= $158,730

Hence the company's net capital spending for the year is $158,730