ACCA Example question

Question for UK-ATX exam

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Larry started trading as an interior designer on 6 April 2015. The following information is relevant for the year to 5 April 2016.

  •  A motor car was acquired on 6 April 2015 for £15,000. Larry drove 10,000 miles in the car during the year to 5 April 2016 of which 3,000 miles were for private journeys.

  • Accoding the Book's solution is calculated as follows: Business motoring expenses £2,000 × 7/10 = £1400.

  •  I undertand that 7/10 are the 7,000miles for business use.

  •  My question is: Where the £2,000 come from?

  • Many Thanks

Replies (12)

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By the_drookit_dug
12th Jun 2020 13:56

What was the question asking you? To calculate the business motor expense?
Not sure either where you're getting 7 months from given what you stated. Looks like 7/10 is 7,000 of 10,000 miles.

Would you mind please stating the question and solution word-for-word.

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Replying to the_drookit_dug:
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By maole
12th Jun 2020 14:07

Sorry you right! 7/10 is 7,000 miles for business use. My question is the £2,000 come from?

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Replying to the_drookit_dug:
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By Accountant A
15th Jun 2020 18:15

'pihp''h

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By Accountant A
15th Jun 2020 18:15

'pih'p

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Replying to Accountant A:
Stepurhan
By stepurhan
12th Jun 2020 14:49

It is in the second bullet point, but that is quoting from the solution not the question.

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Replying to Accountant A:
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By Accountant A
15th Jun 2020 18:15

h'p

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Routemaster image
By tom123
12th Jun 2020 15:42

I imagine the £2000 is given in the question as the total cost of running the car for the year.

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By lesley.barnes
12th Jun 2020 15:59

Accountant A has posted the link to the full question. The OP has edited out the mention of the running costs which are given in the question as £2k so that is were the £2k comes from.

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Scooby
By gainsborough
12th Jun 2020 16:51

Hopefully the OP is not using a FA2015 TX book to study the ATX exam though (which will be based on FA2019 until March 2021).

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By Truthsayer
12th Jun 2020 17:52

Surely this is a wind-up. You edited out where the £2,000 came from, and then you ask where the £2,000 came from?!

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Replying to Truthsayer:
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By gillybean04
12th Jun 2020 20:25

Truthsayer wrote:

Surely this is a wind-up. You edited out where the £2,000 came from, and then you ask where the £2,000 came from?!

Reminds me of those mathematic problem/solution arguments you get on facebook. You can't get the answer right in maths if the question is wrong.

Also reminds me of a brainteaser.
3 men check into a motel. The room is £30, so they all pay £10 each. Later, the receptionist realises they made a mistake. The room was only £25. They can't figure out how to evenly split £5 between three so they give the men £1 each and keeps £2 for themselves (no wonder they couldn't figure out how to split it). So each man paid £9 for the room = £27 + the £2 the receptionist kept......where's the other £1.

Of course that is wrong - the £2 is included in the £27, not the £3 (which was returned to the gentlemen).

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By Cheshire
13th Jun 2020 19:06

Love it when posters dump and run, then all the aweb members end up spending more time and effort that the OP to help!! Including finding the question and posting it, something which the OP couldnt manage for some reason - big fat fail OP and poor form.

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