Neco 2025 Financial Accounting Question 34

Practice objective / multiple choice question 34 from the 2025 Neco Financial Accounting examination.

Neco 2025 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 34 NECO • 2025 • FINANCIAL_ACCOUNTING • objective

A machine was purchased on 1 January 2022 for ₦500,000. Its residual value is ₦50,000 and its estimated useful life is 5 years. The company uses the double‑declining‑balance method of depreciation. At the end of 2024 (after three years) the machine is sold. Calculate the depreciation expense for each of the three years, the book value of the machine just before sale, and the minimum sale price required to realise a gain of at least ₦30,000 on disposal.

Answer Options

A. Depreciation: Year 1 = ₦200,000; Year 2 = ₦130,000; Year 3 = ₦78,000. Book value before sale = ₦92,000. Minimum sale price for a ₦30,000 gain = ₦122,000.
B. Depreciation: Year 1 = ₦250,000; Year 2 = ₦150,000; Year 3 = ₦90,000. Book value before sale = ₦110,000. Minimum sale price for a ₦30,000 gain = ₦140,000.
C. Depreciation: Year 1 = ₦200,000; Year 2 = ₦120,000; Year 3 = ₦80,000. Book value before sale = ₦100,000. Minimum sale price for a ₦30,000 gain = ₦130,000.
Correct Answer D. Depreciation: Year 1 = ₦200,000; Year 2 = ₦120,000; Year 3 = ₦72,000. Book value before sale = ₦108,000. Minimum sale price for a ₦30,000 gain = ₦138,000.
Correct Answer
D
Correct Option:
Depreciation: Year 1 = ₦200,000; Year 2 = ₦120,000; Year 3 = ₦72,000. Book value before sale = ₦108,000. Minimum sale price for a ₦30,000 gain = ₦138,000.

About This Question

This is Neco 2025 Financial Accounting Question 34. It is one of the objective questions from the 2025 Neco Financial Accounting examination.

Difficulty level: Medium .

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