Accounting Multiple Choice Question – 7 October 2024

Alex started a trading business on 1 May 2023 with capital of £40,000.

In his first year of trading, he made a profit for the year of £117,000, selling goods at a mark-up on cost of 60%.

He injected additional capital of £30,000 in the year and withdrew a monthly amount of £3,200 for his living expenses.

He also took drawings from his inventory of goods for his own use with a resale value of £7,200.

He had no inventory at the year end.

What were Alex’s net assets as at 30 April 2024?

Select ONE answer:

1. £141,400
2. £144,100
3. £144,280
4. £179,300

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. Notcorrect
2. Correct – Opening net assets £40,000 + profit for the year £117,000 + Capital Injection £30,000 – Drawings (12 * £3,200) £38,400 – Goods Taken For Own Use (£7,2000 * 100/160) £4,500 == > £144,100
3. Not correct
4. Not correct

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