Swell, Inc. had net ﬁxed assets of $6.5 million on December 31, 2014 and $11 million on December 31, 2015. If Swell's depreciation expense for 2015 was $750,000, what was the ﬁrm's 2015 capital
Spending?

Question

Quizplus · Accepted Answer

The formula to calculate capital spending is: 
Capital Spending = Ending Net Fixed Assets – Beginning Net Fixed Assets + Depreciation Expense
Using this formula, we can calculate Swell's capital spending for 2015: 
Capital Spending = $11 million – $6.5 million + $750,000 
Capital Spending = $5.25 million 
Therefore, the answer is choice D.