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WAEC Accounting 2014 Paper

Question : 14

Total: 45

\; \text{Cost of motor vehicle - 1/12}\; \& \text{N 85,000}

\; \text{Residual value}\; \& \; \text{N5,000}

\; \text{Estimated useful lifespan 10 years}\; \&

Solution:

Concept:

Straight-line depreciation gives an equal annual charge over the asset's useful life.

Explanation:

Depreciable amount = Cost – Residual value.

Depreciable amount =

85,000 - 5,000 = 80,000

Annual depreciation =

\frac{80{,}000}{10} = \text{N}8{,}000

The vehicle was in use for 2 full years up to 31/12/2013.

Accumulated depreciation =

2 \times 8{,}000 = \text{N}16{,}000

Answer:

C. ₦16,000

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