Neco 2020 Financial Accounting Question 14

Practice objective / multiple choice question 14 from the 2020 Neco Financial Accounting examination.

Neco 2020 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 14 NECO • 2020 • FINANCIAL_ACCOUNTING • objective

A machine was purchased on 1\,January\,2020 for ₦800,000. It has a residual value of ₦80,000 and a useful life of 8\,years. The company uses the reducing‑balance method at a rate of 25\% per annum. The machine was sold on 1\,July\,2023 for ₦250,000. Determine (i) the accumulated depreciation up to the date of sale and (ii) the profit or loss on disposal. Express amounts in naira, rounded to the nearest naira.

Answer Options

A. Accumulated depreciation: 504688; Profit on disposal: 20000
Correct Answer B. Accumulated depreciation: 504688; Loss on disposal: 45313
C. Accumulated depreciation: 492000; Loss on disposal: 58000
D. Accumulated depreciation: 530000; Loss on disposal: 30000
Correct Answer
B
Correct Option:
Accumulated depreciation: 504688; Loss on disposal: 45313

About This Question

This is Neco 2020 Financial Accounting Question 14. It is one of the objective questions from the 2020 Neco Financial Accounting examination.

Difficulty level: Medium .

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