Purchase Solution

Capital Spending and Depreciation

Not what you're looking for?

Ask Custom Question

Teddy's Pillows has beginning net fixed assets of $480 and ending net fixed assets of $530. Assets valued at $300 were sold during the year. Depreciation was $40. What is the amount of capital spending?
A. $10
B. $50
C. $90
D. $260
E. $390

Purchase this Solution
Solution Summary

This solution shows step-by-step calculations to determine the amount of capital spending for Teddy's Pillows. All workings and formulas are shown in a table format.

Solution Preview

Teddy's Pillows has beginning net fixed assets of $480 and ending net fixed assets of $530. Assets valued at $300 were sold during the year. Depreciation was ...

Purchase this Solution
Free BrainMass Quizzes
Learning Lean

This quiz will help you understand the basic concepts of Lean.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

View More Free Quizzes
Related BrainMass Solutions

  • production function

    If the savings rate is 0.2 and the depreciation rate is 0.05, calculate the steady-state capital stock per worker, output per worker, and consumption per worker. c.

  • Net Income, Operating Cash Flow & Cash Flow from Assets

    Net Capital Spending (NCS) = Change in Net fixed assets + Depreciation Change in net fixed assets = 9,700-9,100=600 NCS = 600+2,700 = 3,300 Change in Net Working Capital Working Capital = Current Assets - Current Liabilities At the beginning of

  • Free cash flow

    Template to solve the problem: A project's free cash flows = Change in earnings before interest and taxes - change in taxes + change in depreciation - change in net working capital - change in capital spending Change in earnings before

  • Calculating Owners' Equity, Net Working Capital, Fixed Assets, Long Term Debt, and Cash Flow to Creditors

    Net capital spending = Net fixed assets 2011 - Net fixed assets 2010 + Depreciation Net capital spending = $4,616 - 3,857 + 1080 = $1,839 Net capital spending = Fixed assets bought - Fixed assets sold $1,839 = $1,895 - Fixed assets sold Fixed assets

  • Calculating Cash Flows

    Ending net fixed assets 18,840 Beginning net fixed assets 16,560 Depreciation 2,840 Capital spending 5,120 Beginning current asset 2,940 Beginning current liabilities 2,592 Beginning net working capital 348 Ending current asset

  • Operating Cash Flow and Net Working Capital

    The formula for net capital spending is the change in fixed assets plus depreciation." 2 Net capital spending can be negative if there is a sale of fixed assets or Sale of fixed assets is more than purchase.

  • Inflation, Budget Constraint, Unemployment Rate

    Gross Investment = Net Investment + Depreciation We can rearrange this to say: Net Investment = Gross Investment - Depreciation The capital stock of an economy rises when net investment is positive, that is when gross investment exceeds depreciation

  • Incremental cash flows of the investment

    Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project.

  • Valuation of Company XYZ

    It reported depreciation of $960 million in that year, and capital spending was $1.2 billion.

View More Related Solutions