Question

Rotweiler Obedience School’s December 31, 2015, balance sheet showed net fixed assets of $1,760,000, and the December 31, 2016, balance sheet showed net fixed assets of $2,110,000. The company’s 2016 income statement showed a depreciation expense of $328,000.

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

The company's net capital spending for 2016 = Net fixed assets at the End of year - Net fixed assets at Beginning of the year + Depreciation expenses of the year

Where,

Rotweiler Obedience School’s Net fixed assets at the End of year (on December 31, 2016) =$2,110,000

Net fixed assets at Beginning of the year or at the end of previous year (on December 31, 2015) = $1,760,000

Depreciation expenses of the year = $328,000

Therefore,

The company's net capital spending for 2016 = $2,110,000 - $1,760,000 + $328,000

= $678,000

Net capital spending = $678,000