Tag: KS3

Alex Trading plc purchased a van on 1 October 2023 for a total cost of £22,000 by paying £17,500 cash

and trading in an old van.

The old van had cost £20,000 and the related accumulated depreciation was £14,200.

The loss on disposal in Alex Trading plc’s income statement for the year ended 31 December 2023 is?

Select ONE answer:

1. £1,300
2. £2,000
3. £2,500
4. £5,800

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 – Cost £20,000 – Depreciation £14,200 – Trade in Allowance (£22,000 – £17,500) = Loss of £1,300
2. Not correct
3. Not correct
4. Not correct

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

Alex Trading Ltd buys a machine on 31 August 2019 for £22,000.

It has an expected life of seven years and an estimated residual value of £1,000.

On 30 June 2023 the machine is sold for £9,000.

Alex Trading Ltd’s year-end is 31 December.

Alex trading Ltd’s accounting policy is to charge depreciation monthly using the straight-line method.

The loss on disposal of the machine which will appear in the income statement for the year ended 31 December 2023 is?

Select ONE answer:

1. £1,000
2. £1,500
3. £3,500
4. £5,800

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 – Cost of asset = £22,000 – Accumulated depreciation (46 months x (21,000/84)) = £10,500 the carrying amount at date of disposal less Proceeds on disposal £9,000 = Loss on disposal £1,500
3. Not correct
4. Not correct

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