Accounting Multiple Choice Question – 16 March 2024

A company’s plant and machinery ledger account for the year ended 30 September 2023 was as follows:

PLANT AND MACHINERY

DR  1 October 2022  Balance B/D  £381,200

DR  1 December 2022  Cash  £18,000

DR  Total  £399,200

CR  1 June 2023  Disposal Account  £36,000

CR  30 September 2023  Balance c/d  £363,200

CR  Total  £399,200

The company’s policy is to charge depreciation at 20% per year on the straight-line basis.

What is the depreciation charge in the income statement for the year ended 30 September 2023?

Select ONE answer:

1. £74,440
2. £84,040
3. £72,640
4. £76,840

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 4

1. Not correct
2. Not correct
3. Not correct
4. Correct –  December addition – 18,000 x 20% x 10/12 = £3,000,  June disposal – 36,000 x 20% x 8/12 = £4,800,  Balance – 345,200 x 20% = £69,040 = Total  £76,840

This work is licensed under a Creative Commons Attribution 4.0 International License.