the 2018 balance sheet showed net fixed assets of $6.3 million. The company's 2018 income statement showed a depreciation expense of $825,000. What was net capital spending for 2018? Multiple Choice $1,475,000 $3,125,000 $-2,300,000 $-1,475,000 B

the 2018 balance sheet showed net fixed assets of $6.3 million. The company's 2018 income statement showed a depreciation expense of $825,000. What was net capital spending for 2018? Multiple Choice $1,475,000 $3,125,000 $-2,300,000 $-1,475,000 B

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

Logano Driving School's 2017 balance sheet showed net fixed assets of $4 million, and
the 2018 balance sheet showed net fixed assets of $6.3 million. The company's 2018
income statement showed a depreciation expense of $825,000. What was net capital
spending for 2018?
Multiple Choice
O
$1,475,000
$3,125,000
$-2,300,000
$-1,475,000
B

Multiple Choice
O
O
O
O
O
$1,475,000
$3,125,000
$-2,300,000
$-1,475,000
$2,300,000

Expert Solution

Step 1

Solution..

Fixed assets at the beginning = $4 millions

Fixed assets at the end = $6.3 millions

Depreciation = $825,000

Net capital spending = ?

Ending net fixed assets

= Beginning net fixed assets + net capital spending - depreciation

Hence,

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