WAEC Accounting 2023 Paper

Concept:Sum-of-the-years'-digits depreciation uses the remaining life divided by the sum of the years.Explanation:The sum of the years' digits is $4+3+2+1=10$.Using the stated cost of ₦$120{,}000$, the depreciable amount is $\text{NGN}120{,}000-\text{NGN}2{,}000=\text{NGN}118{,}000$.First-year depreciation is $\frac{4}{10}\times \text{N}118{,}000=\text{N}47{,}200$.Thus, the year-end book value would be $\mathrm{N}120{,}000-\mathrm{N}47{,}200=\mathrm{N}72{,}800$.This is not among the options, so the question likely intended the cost as ₦$12{,}000$.Then the depreciable amount is $\mathrm{N}12{,}000-\mathrm{N}2{,}000=\mathrm{N}10{,}000$.First-year depreciation becomes $\frac{4}{10}\times \mathrm{N}10{,}000=\mathrm{N}4{,}000$.So, the value of the asset at the end of the first year is $₦12{,}000-₦4{,}000=₦8{,}000$.Answer:₦$8{,}000$ Option B.