JAMB - Accounts Principles Of Accounts (2025 - No. 37)
Use the following information to answer this question
A fixed asset was bought for #60,000 on 1st January, 1997. Depreciation was provided at 10% on cost. It was sold for #16,000 on 30th June, 2001.
The profit or loss sale was
17,000 loss
#16,000 loss
#17,000 profit
#16,000 profit
Explanation
Calculation of depreciation
= \(\frac{10}{100} \times 60, 000\) = # 6000
Depreciation at the year of disposal = \(\frac{6}{12}\) x \(\frac{10}{100}\) x 60,000 = #3000
| # | |||
| Cost | 60,000 | provision for depreciation | 27,000 |
| Cash realised from sales of assets | 16,000 | ||
| loss on sales | 17,000 |
60000 60,000
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