Question

Beta Limited has opening PP&E balance of 150, a depreciation expense of 75, and a closing PP&E balance of 170, what is Beta's net capital expenditure ​

Answer 1

Capital Expenditure of Beta Limited is 95.

Explanation:

It is problem of commercial field in any company. To maintain, regulate financial condition in a best economic way, Capital expenditure enable to acquire relative accountancy insights and gives thorough understanding of monetary capabilities of a company.

In this question, as they are asking about finding net Capital expenditure of Beta Limited and given date are as follows:

PP&E balance : 150

Depreciation expense: 75

Closing PP&E balance: 170  

To find  net capital expenditure ​of Beta Limited, we use a logic such that capital expenditure equals difference between current period and prior period, in addition to which depreciation of current period is added.

It is one of the major financial factors in development of an organization. capital expenditure ​is money invested by any company to control various assets that is responsible for earning high return and overall reputation of it.

Therefore finally, it simplifies that

Capital Expenditure (C)= PP&E (current period) – PP&E (prior period) + Depreciation (current period)

C= 170 - 150 + 75

C= 95

Answer 2

Beta's Net capital expenditure is 95.

Explanation:

The computation of the Beta's net capital expenditure is given below

Closing PP&E balance + Depreciation Expense - Opening PP&E balance

= 170 +75 - 150

= 95

While computing it, we have added the depreciation expense and deducted the PP &E balance to the closing PP&E balance so that the accurate amount can be more.

It can also be calculated by capital expenditures by using data from a company's income statement and balance sheet.  In the income statement, find the amount of depreciation expenses recorded for the current period. in the balance sheet the current period's property, plant and equipment are placed in line- item balance.