Tag: Financial Accounting

Alex plc purchased a machine for £120,000 on 1 October 2018.

The estimated useful life is 4 years with a residual value of £4,000.

Alex plc uses the straight-line method for depreciation and charges depreciation on a monthly basis.

The charge for depreciation in the income statement for the year ended 31 December 2018 is?

Select ONE answer:

1. £4,833
2. £7,250
3. £7,500
4. £29,000

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 2

1. Not correct
2. Correct– (£120,000-4,000) / 48 x 3 = £7,250
3. Not correct
4. Not correct

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

Alex plc bought a car on 1 January 2017 for £10,000 and decided to depreciate it at 30% per annum on a reducing balance basis.

It was disposed of on 1 January 2019 for £6,000.

The net effect on the income statement for the year ended 31 December 2019 is a credit of?

Select ONE answer:

1. £1,100
2. £3,000
3. £4,000
4. £5,100

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 – (£10,000 x 70% x 70%) – £6,000 = £1,100
2. Not correct
3. Not correct
4. Not correct

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

Alex plc purchases a machine for which the supplier’s list price is £18,000.

Alex plc pays £13,000 in cash and trades in an old machine which has a carrying amount of £8,000.

It is the company’s policy to depreciate such machines monthly at the rate of 10% per annum on cost.

The carrying amount of the new machine after one year is?

Select ONE answer:

1. £16,200
2. £18,000
3. £18,900
4. £21,000

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 – £18,000 x 90% = £16,200
2. Not correct
3. Not correct
4. Not correct

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

Alex plc purchased some plant and equipment on 1 July 2021 for £40,000.

The estimated scrap value of the plant in ten years’ time is estimated to be £4,000.

Alex plc’s policy is to charge depreciation monthly on the straight-line basis.

The depreciation charge on the plant in Alex plc’s income statement for the reporting period of twelve months ending 30 September 2021 should be?

Select ONE answer:

1. £900
2. £1,000
3. £2,700
4. £3,000

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 – (£36,000/120 x 3 = £900
2. Not correct
3. Not correct
4. Not correct

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