Accounting Multiple Choice Question – 21 March 2023

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:

1. Cash Inflow £NIL and Cash Outflow £132,000
2. Cash Inflow £8,000 and Cash Outflow £112,000
3. Cash Inflow £8,000 and Cash Outflow £140,000
4. 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

1. Correct – £140k – £8k
2. Not correct
3. Not correct
4. Not correct

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