passwella.
Menu

JAMB Principles of Accounts 2022 Question 2

Question 2

Depreciation

Use the information below to answer questions 1 and 2.
On January 1, 2005 a machine was bought for ₦56,000 to last for 5 years with a residual value of ₦1000.

The rate of the yearly depreciation expense would be

  1. A.50%
  2. B.20%
  3. C.30%
  4. D.40%
Show the answer and explanation

Answer: B (20%)

Explanation

Spreading the cost equally over 5 years means 1/5 of it each year, which is 20%.