Question

Swell, Inc. had net fixed assets of $13 million on December 31, 2008 and $22 million on December 31, 2009. If Swell's depreciation expense for 2009 was $2 million, what was the firm's 2009 capital spending?

Answer 1

Ans.	Ending fixed assets	$22,000,000
	Add: Depreciation expenses	$2,000,000
	Less: Beginning fixed assets	-$13,000,000
	Net capital spending	$11,000,000
	*Net Capital Spending can also be calculated by the following Fixed assets T account.
	Fixed Assets Account
	Particulars	Amount	Particulars	Amount
	To balance b/d (beginning)	$13,000,000	By Accumulated depreciation	$2,000,000
	To bank (balancing figure)	$11,000,000	By balance c/d (ending)	$22,000,000
		$24,000,000		$24,000,000
	To bank shows the purchase of fixed assets which is the net capital spending.