Neco 2017 Financial Accounting Question 35

Practice objective / multiple choice question 35 from the 2017 Neco Financial Accounting examination.

Neco 2017 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 35 NECO • 2017 • FINANCIAL_ACCOUNTING • objective

A machine was purchased on 1 January 2018 for \(500,000\) naira. Its residual value is \(50,000\) naira and its estimated useful life is 5 years. The company uses the double‑declining balance method. At the end of 2020 the machine was sold for \(120,000\) naira. Calculate the depreciation expense for the year 2020 and state the gain or loss on disposal.

Answer Options

A. Depreciation 2020 = 80,000 naira; Gain on disposal = 4,000 naira
Correct Answer B. Depreciation 2020 = 72,000 naira; Gain on disposal = 12,000 naira
C. Depreciation 2020 = 72,000 naira; Loss on disposal = 8,000 naira
D. Depreciation 2020 = 64,000 naira; Gain on disposal = 12,000 naira
Correct Answer
B
Correct Option:
Depreciation 2020 = 72,000 naira; Gain on disposal = 12,000 naira

About This Question

This is Neco 2017 Financial Accounting Question 35. It is one of the objective questions from the 2017 Neco Financial Accounting examination.

Difficulty level: Medium .

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