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JAMB Principles of Accounts 2020 Question 22

Question 22

Depreciation

Use the information below to answer questions 22 and 23
A machine bought for ₦35,000 was estimated to have a life span of 5 years with a scrap value of ₦9000
The yearly depreciation using the straight line method would be

  1. A.₦5200
  2. B.₦800
  3. C.₦6500
  4. D.₦4400
Show the answer and explanation

Answer: A (₦5200)

Explanation

Straight line = (cost − scrap value) ÷ life = (35,000 − 9,000) ÷ 5 = ₦5,200.