Earnhardt Driving School\'s 2008 balance sheet showed net fixed assets of $4.5 m

Question

Earnhardt Driving School's 2008 balance sheet showed net fixed assets of $4.5 million, and the 2009 balance sheet showed net fixed assets of $6 million. The company's 2009 income statement showed a depreciation expense of $805,000. What was net capital spending for 2009?

rev: 09_17_2012

Earnhardt Driving School's 2008 balance sheet showed net fixed assets of $4.5 million, and the 2009 balance sheet showed net fixed assets of $6 million. The company's 2009 income statement showed a depreciation expense of $805,000. What was net capital spending for 2009?

Explanation / Answer

increase in Net fixed asset=6-4.5 million=1,500,000$

depriciation in income=$ 805,000

spending=1,500,000-805,000

=$695,000

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