A farmer purchased a sprayer for N12,500 in 1974, at the end of the fourth year, he sold it for N4,300. The annual depreciation of the equipment is

A farmer purchased a sprayer for N12,500 in 1974, at the end of the fourth year, he sold it for N4,300. The annual depreciation of the equipment is

Answer Details

To calculate the annual depreciation of the equipment, we need to find the total depreciation first. The farmer purchased the sprayer for N12,500 in 1974 and sold it for N4,300 at the end of the fourth year. The total depreciation of the equipment = Purchase price - Sale price = N12,500 - N4,300 = N8,200 The equipment was used for four years, so the annual depreciation is: Annual depreciation = Total depreciation / Number of years of use = N8,200 / 4 = N2,050 Therefore, the annual depreciation of the equipment is N2,050. Option C is the correct answer.