Robin’s Business Had Total Assets at the Start of the Year

question 11

Multiple Choice

Robin’s business had total assets at the start of the year amounting to £140 000 of which £80 000 related to current assets. Robin disposed of a fixed asset which had been purchased for £30 000 and on which £16 000 depreciation had been charged for £15 000 and bought a replacement asset for £26 000. He charged £11 000 depreciation on his assets in the year.
- what would be the effect of all the transactions during the year on total profit and on the cash flow statement?

• A) Total profit would be reduced by £10000 and the cash flow statement would show a net outflow of £26000
• B) Total profit would be reduced by £11000 and the cash flow statement would show a net outflow of £26000
• C) Total profit would be reduced by £10000 and the cash flow statement would show a net outflow of £11000
• D) Total profit would be reduced by £11000 and the cash flow statement would show a net outflow of £15000

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Definitions:

Fireside Chats

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Franklin D. Roosevelt

The 32nd President of the United States, who served four terms from 1933 to 1945 and is best known for his role in leading the country during the Great Depression and World War II.

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Individuals who hold leadership positions within political parties, responsible for setting party directives and strategy.

Political Issues

Matters concerning the governance of a country or area, often involving debates on policies, governance structures, and the distribution of power.