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WAEC Financial Accounting 2020 Question 41

Question 41

Depreciation

A computer set bought for ₦150,000 was disposed for ₦45,000 after some years of use. The profit on disposal was ₦7,500. Accumulated depreciation at the time of disposal was

  1. A.₦112,500.
  2. B.₦105,000.
  3. C.₦97,500.
  4. D.₦37,500.
Show the answer and explanation

Answer: A (₦112,500.)

Explanation

Book value = 45,000 − 7,500 profit = 37,500; accumulated depreciation = 150,000 − 37,500 = ₦112,500.