WAEC Financial Accounting 2004 Question 46

Purchase price of equipment N60,000
Freight and installation cost N10,000
Annual maintenance cost N1,000
Estimated useful life – 5 years
Estimated scrap value N2,000
Using reducing balance method at the rate of 20%. What is the depreciation charge for the second year?

1. A.N13,600
2. B.N11,200
3. C.N10,880
4. D.N9,600