Accounting Multiple Choice Question – 31 May 2021

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A fixed asset is purchased on 1 April 2018 at a cost of £240,000.

It has an estimated residual value of £40,000 at the end of its 5 year life and is to be depreciated on the reducing balance basis at the rate of 30 % each year.

What is the depreciation charge for the year ending 31 March 2020 (to the nearest £)?

Select ONE answer:

  1. £42,000
  2. £50,400
  3. £98,000
  4. £11,7600

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 2

  1. Not correct
  2. Correct ==> £240,000 * 0.3 = £72,000 ==> £168,000 * 0.3 = £50,400
  3. Not correct
  4. Not correct

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