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A capital expenditures budget for 2021 lists cutting machinery $18,000, assembly machinery $43,000, a delivery vehicle $35,000 and office equipment $4,000. What is the 2021 total?
A$100,000
B$90,000
C$96,000
D$67,000
Answer & Solution
Correct answer: A. $100,000
1. The budget lists each planned asset by year and totals each column.
2. The four 2021 lines are $18,000, $43,000, $35,000 and $4,000.
3. Their sum is $100,000 planned for capital spending in 2021.
4. $96,000 drops the office equipment line, which is small but still a fixed asset purchase.
_Source: Jonick, Principles of Managerial Accounting (UNG Press, CC BY-SA 4.0), section 7.11 Capital Expenditure Budget_
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