WAEC - Accounts Principles Of Accounts (2022 - No. 44)
Use the following information to answeer questions below
Kako Ltd bought a machine for D 1,200,000 on 1st January 2018. Depreciation was provided annually at a rate of 10% using the diminishing balance method. The machine was sold for D 880,000 on 31st December 2021.
The net book value of the machine in the balance sheet as at 31st December 2020 was
D 874,800
D 972,000
D 1,080,000
D 787,320
Explanation
From 2018 to 2021( accounting year) is three (3) years
| D | |
| Cost | 1200000 |
| Year 1 ( 10% x 1200000) | 120000 |
| 1080000 | |
| Year 2 ( 10% x 1080000) | 108000 |
| 972000 | |
| Year 3 ( 10% x 972000) | 97200 |
| Depreciation | 874800 |
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