Lester's Markets has total revenues of $3,811,costs of $2,902,depreciation of $315,interest expense of $168,and taxes of $89.At the beginning of the year,the firm had current assets of $2,150,total assets of $4,908,and total liabilities of $1,964.At the end of the year,the current assets are $2,202,total assets are $5,103,and total liabilities are $1,952.What is the amount of net capital spending for the year?

Question

Quizplus · Accepted Answer

Net capital spending can be calculated using the following formula:
Net capital spending = Ending Net Fixed Assets - Beginning Net Fixed Assets + Depreciation
Beginning Net Fixed Assets = Total Assets - Current Assets - Total Liabilities = $4,908 - $2,150 - $1,964 = $794
Ending Net Fixed Assets = Total Assets - Current Assets - Total Liabilities = $5,103 - $2,202 - $1,952 = $949
Therefore, Net capital spending = $949 - $794 + $315 = $458. 
Therefore, the correct option is (C).

Lester's Markets Has Total Revenues of $3,811,costs of $2,902,depreciation of $315,interest