The Play House's December 31, 2009 balance sheet showed net fixed assets of $1,238,000 and the December 31, 2010 balance sheet showed net fixed assets of $1,416,000. The company's 2010 income statement showed a depreciation expense of $214,600. What was the firm's net capital spending for 2010?

Question

Quizplus · Accepted Answer

Net capital spending is calculated as the change in net fixed assets plus depreciation. The change in net fixed assets is $1,416,000 - $1,238,000 = $178,000. Adding the depreciation expense of $214,600 gives $178,000 + $214,600 = $392,600.

The Play House's December 31, 2009 Balance Sheet Showed Net