An asset was bought on 1st January, 1995 for N60,000. Depreciation was provided for annually at 20% on cost. It was sold for N21,000 on 30th October 1998. D...

Answer Details

Accumulated depreciation is the total amount of depreciation charged on an asset since it was acquired. Using the straight-line method, the annual depreciation charged on the asset is 20% of N60,000 which is N12,000. So, from 1st January, 1995 to 31st December, 1997 (3 years), the accumulated depreciation will be N12,000 x 3 = N36,000. Since depreciation is charged fully in the year of disposal, the accumulated depreciation for the period from 1st January, 1998 to 30th October, 1998 will be 20% of N60,000 which is N12,000. Therefore, the total accumulated depreciation will be N36,000 + N12,000 = N48,000. Hence, the answer is N48,000.