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WAEC Financial Accounting 1997 Question 14

Question 14

Depreciation

An asset was bought on 1st January, 1992 for N20,000. Depreciation was provided for annually at 20% on cost. It was sold for N7,000 on 1st July, 1995.
Accumulated depreciation at the time of sale was

  1. A.N16,000
  2. B.N14,000
  3. C.N12,000
  4. D.N8,000
  5. E.N6,000
Show the answer and explanation

Answer: B (N14,000)

Explanation

20% × N20,000 = N4,000 a year; from 1/1/92 to 1/7/95 is 3½ years, so N14,000.