Question

Micro, Inc., started the year with net fixed assets of $75,175. At the end of the year, there was $96,525 in the same account, and the company's income statement showed depreciation expense of $13,175 for the year. What was the company's net capital spending for the year?

a) $83,350
b) $40,010
c) $21,350
d) $42,420
e) $34,525

Answer 1

e $34,525

Step-by-step explanation:

Micro inc started the year with a net fixed assets of $75,175

At the end of the year, the net fixed assets was $96,525

The depreciation expense was $13,175

Therefore, the company's net capital spending for the year would be calculated as;

= Ending net fixed assets + Depreciation expense - Beginning net fixed cost

= $96,525 + $13,175 - $75,175

= $34,575