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ACCA Applied Knowledge · Financial Accounting · Statement of cash flows (excluding partnerships)

Zeta Co had plant with a carrying amount of $240,000 at 1 January and $280,000 at 31 December. During the year depreciation of $60,000 was charged and plant with a carrying amount of $30,000 was sold. There were no revaluations or other movements, and all purchases were paid in cash. What is the cash paid to acquire plant?

Additions are found by rolling forward the carrying amount: closing 280,000 less opening 240,000 plus depreciation 60,000 plus disposals 30,000, giving 130,000.

  1. A$130,000
  2. B$70,000
  3. C$90,000
  4. D$100,000Correct

Explanation

Closing 280,000 = opening 240,000 + additions - depreciation 60,000 - disposals 30,000. So additions = 280,000 - 240,000 + 60,000 + 30,000 = 130,000. Wait, recompute: 40,000 + 90,000 = 130,000.

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