Test Index

WAEC Accounting 2022 Paper

Question : 43

Total: 50

Solution:

Concept:

Under the diminishing balance method, depreciation is charged each year on the previous year's book value.

Explanation:

The machine was used for 4 full years: 2018, 2019, 2020 and 2021.

Year 1:

10\% \times \mathrm{D}1{,}200{,}000 = \mathrm{D}120{,}000

; book value becomes

\mathrm{D}1{,}080{,}000

Year 2:

10\% \times \mathrm{D}1{,}080{,}000 = \mathrm{D}108{,}000

; book value becomes

\mathrm{D}972{,}000

Year 3:

10\% \times \mathrm{D}972{,}000 = \mathrm{D}97{,}200

; book value becomes

\mathrm{D}874{,}800

Year 4:

10\% \times \mathrm{D}874{,}800 = \mathrm{D}87{,}480

; book value becomes

\mathrm{D}787{,}320

Accumulated depreciation

= \mathrm{D}1{,}200{,}000 - \mathrm{D}787{,}320 = \mathrm{D}412{,}680

Also,

120{,}000 + 108{,}000 + 97{,}200 + 87{,}480 = 412{,}680

Answer:

\mathrm{D}412{,}680

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