JAMB - Accounts Principles Of Accounts (2020 - No. 22)

Use the information below to answer this question

A machine bought for ₦35,000 was estimated to have a life span of 5 years with a scrap value of ₦9000.

The yearly depreciation using the straight-line method would be

₦5200

₦800

₦6500

₦4400

To calculate the yearly depreciation using the straight-line method, use the formula;

Yearly Depreciation = \(\frac{\text{cost of asset - scrap value}}{\text{useful life}}\)

= \(\frac{35,000 - 9,000}{5}\) = \(\frac{26,000}{5}\) = #5200.