The cost of a machine is ₦10,000. The residual value is ₦4,000. It is expected to last for 4 years. Using the straight line method, what is the amount of de...

Assessment: JAMB UTME - Principles of Accounts - 2019 Subject: Financial Accounting

Question 1 Report

The cost of a machine is ₦10,000. The residual value is ₦4,000. It is expected to last for 4 years. Using the straight line method, what is the amount of depreciation charged per annum?
Answer Details
The straight line method of depreciation is a simple way of calculating the amount of depreciation to be charged each year for an asset. To use this method, we subtract the residual value (the value of the asset after it has been fully depreciated) from the original cost of the asset, and then divide this by the number of years the asset is expected to last. So, for the machine in this question: - Original cost: ₦10,000 - Residual value: ₦4,000 - Years expected to last: 4 The amount of depreciation to be charged per year would be: ₦10,000 - ₦4,000 = ₦6,000 ₦6,000 ÷ 4 years = ₦1,500 So, the amount of depreciation charged per annum is ₦1,500.
Read lesson note on Nature And Significance Of Accounting (JAMB)
View Answer

Related Questions

1

The advantage of double entry is that
2

Goods were purchased for resale on credit costing ₦150,000 on 30th September 20X8 from Tosanwumi International. The entry to record these transaction is debit
3

Transactions are recorded or posted to the ledger in line with
4

Use the following information to answer this question The following are the final accounts of a trading organisation Wazobi ventures, for the year ended 30th...
5

Show how the following transaction will be recorded applying the double entry principle: Rent ₦50,000 was paid by Mr. Roi to his landlord on 1st July, 20 × 7...
6

If only wages is shown on the trial balance, it should be charged to the
7

Accounts can be classified into
8

A statement in a double entry system in which are recorded all the transactions of one specific class, which takes place during the period is called

Download The App On Google Playstore

Everything you need to excel in your exams

Green Bridge CBT Mobile App
Personalized AI Learning Chat Assistant
200,000+ Exam Questions Across IGCSE, JAMB, WAEC & NECO
Over 3,900 Lesson Notes
Offline Support - Learn Anytime, Anywhere
Green Bridge Timetable
Literature Summaries & Potential Questions
Track Your Performance & Progress
In-depth Explanations for Comprehensive Learning