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JAMB Principles of Accounts 2014 Question 19

Question 19

Depreciation

If machine X cost ₦600,000 with anticipated life span of five years and estimated scrap value of ₦50,000, using straight line method; depreciation charged for two years will be

  1. A.₦700,000.
  2. B.₦240,000.
  3. C.₦220,000.
  4. D.₦202,000.
Show the answer and explanation

Answer: C (₦220,000.)

Explanation

Yearly charge = (600 000 − 50 000) ÷ 5 = 110 000. For two years = ₦220 000.