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GCE Financial Accounting 1989 Question 36

Question 36

Depreciation

A machine cost ₦12,000 and has a useful life of 4 years and an expected disposal value of ₦400. Using the straight line method, the annual depreciation is

  1. A.₦3,100
  2. B.₦3,000
  3. C.₦2,900
  4. D.₦2,300
  5. E.₦2,000
Show the answer and explanation

Answer: C (₦2,900)

Explanation

(12,000 − 400) ÷ 4 = ₦2,900 a year.