Tag: Non-current Assets

A plant account is shown below:

PLANT

DR  1 January 2023  Balance Plant Purchased 2021  £380,000

DR  1 April 2023  Cash – plant purchased  £51,000

DR  Total  £431,000

CR  1 October 2023  Disposal – Cost of plant sold  £30,000

CR  31 December 2023  Balance  £401,000

CR  Total  £431,000

The company’s policy is to charge depreciation on plant monthly at 20% per year on the straightline basis.

What should the company’s plant depreciation charge be in the income statement for the year

ended 31 December 2023?

Select ONE answer:

1. £82,150
2. £79,150
3. £77,050
4. £74,050

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 – (Plant held all year (380,000 – 30,000) x 20% = £70,000 + New plant (51,000 x 20%x 9/12) = £7,650 – Plant disposed of (30,000 x 20% x 9/12) = £4,500 ==> £82,150
2. Not correct
3. Not correct
4. Not correct

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

The carrying amount of Alex Trading Ltd’s non-current assets was £200,000 at 1 August 2022.

During the year ended 31 July 2023, the company sold non-current assets for £25,000 on which it made a
loss of £S,000.

The depreciation charge for the year was £20,000. The carrying amount of non-current assets at 31 July 2023 is?

Select ONE answer:

1. £150,000
2. £175,000
3. £180,000
4. £195,000

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 –   ((200,000 – 20,000- 25,000 -5,000 = 150,000)
2. Not correct
3. Not correct
4. Not correct

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

Alex Trading’s asset register shows a total carrying amount of £145,600.

The non-current asset accounts in the nominal ledger show a carrying amount of £135,600.

The difference is due to an asset having been disposed of but not having been eliminated from the asset register.

This disposal could have taken place….?

Select ONE answer:

1. With disposal proceeds of £15,000 and a profit on disposal of £5,000
2. With disposal proceeds of £15,000 and a carrying amount of £5,000
3. With disposal proceeds of £15,000 and a loss on disposal of £5,000
4. With disposal proceeds of £5,000 and a carrying amount of £5,000

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 – If disposal proceeds were £15,000 and profit on disposal is £S,000, then carrying amount must be £10,000, the difference between the asset register figure and the non-current asset account in the nominal ledger
2. Not correct
3. Not correct
4. Not correct

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