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 a...

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The net book value of an asset is the cost of the asset less its accumulated depreciation. From the information given, we know that the machine was bought for D 1,200,000 and depreciation is charged at 10% per annum using the diminishing balance method. Therefore, the accumulated depreciation as at 31st December 2020 is D 1,200,000 x 10% x 3 = D 360,000. The net book value of the machine as at 31st December 2020 will be the cost of the machine less the accumulated depreciation, which is D 1,200,000 - D 360,000 = D 840,000. Therefore, the net book value of the machine in the balance sheet as at 31st December 2020 is D 840,000. Option A - D 874,800 is not correct because it is higher than the net book value as at 31st December 2020. Option B - D 972,000 is not correct because it is higher than the cost of the machine. Option C - D 1,080,000 is not correct because it is higher than the cost of the machine. Option D - D 787,320 is not correct because it is lower than the net book value as at 31st December 2020. Therefore, the correct answer is option A - D 874,800.