Question

Rotweiler Obedience School’s December 31, 2015, balance sheet showed net fixed assets of $1,735,000, and the December 31, 2016, balance sheet showed net fixed assets of $2,060,000. The company’s 2016 income statement showed a depreciation expense of $323,000.

What was the company's net capital spending for 2016? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Net capital spending            $

Answer 1

Net capital spending is the amount that has been spent in the year 2016 to acquire new asset.

In 2016 asset was 2060000, and in 2015 it was 1735000, so there was increase of (2060000 – 1735000) = 325000.

Moreover there was a depreciation expense of 323000 in the year 216, so that amount will also will be added to the net capital spending

So total money spend to acquire new asset in 2016 = 325000 + 323000 = $648000

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