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WAEC Financial Accounting 2016 Question 20

Question 20

Depreciation

Use the following information: Acquisition cost of computers Le 80,000; Installation cost Le 20,000; Estimated residual value Le 4,000; Estimated useful life 5 years.
The depreciable value of computers is

  1. A.Le 80,000.
  2. B.Le 96,000.
  3. C.Le 100,000.
  4. D.Le 104,000.
Show the answer and explanation

Answer: B (Le 96,000.)

Explanation

Depreciable value = total cost (80,000 + 20,000) - residual value 4,000 = Le 96,000.