WAEC Accounting 2022 Paper

Concept:The diminishing balance method calculates depreciation on the net book value at the beginning of each year.Explanation:The machine was used from 1st January 2018 to 31st December 2021, which is 4 full years.Cost of machine = $D\,1{,}200{,}000$.Year 1: $2018$Depreciation = $10\% \times 1{,}200{,}000 = D\,120{,}000$Net book value = $1{,}200{,}000 - 120{,}000 = D\,1{,}080{,}000$Year 2: $2019$Depreciation = $10\% \times 1{,}080{,}000 = D\,108{,}000$Net book value = $1{,}080{,}000 - 108{,}000 = D\,972{,}000$Year 3: $2020$Depreciation = $10\% \times 972{,}000 = D\,97{,}200$Net book value = $972{,}000 - 97{,}200 = D\,874{,}800$Year 4: $2021$Depreciation = $10\% \times 874{,}800 = D\,87{,}480$Net book value at sale = $874{,}800 - 87{,}480 = D\,787{,}320$Answer:The correct answer is D. D 787,320.