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During the year ended 31 March 2022, Alex plc sold plant and machinery for £8,000.
This plant had cost £60,000 and had a book value of £10,000.
An additional £140,000 was spent on new plant and machinery, which was depreciated at the end of the year by 20%.
In preparing the cash flow statement at the end of the year, how are the above transactions shown under the capital expenditure heading?
Select ONE answer:
- Cash Inflow £NIL and Cash Outflow £132,000
- Cash Inflow £8,000 and Cash Outflow £112,000
- Cash Inflow £8,000 and Cash Outflow £140,000
- Cash Inflow £10,000 and Cash Outflow £140,000
Show your workings to arrive at your answer, and explain and justify your reasons:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
This multiple-choice question is suitable for Accounting KS5 classes.
The answer is 1
- Correct – £140k – £8k
- Not correct
- Not correct
- Not correct

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