The accounting year of Fehintola Ltd. ends on 31st December every year. Pant and Machinery purchased on 1st January, Year 1 N600,000 Depreciation rate per anuum, 10% Scrap value, N60,000. Using reducing balance method, what is the net book value on 31st December of Yr. 2?

The accounting year of Fehintola Ltd. ends on 31st December every year. Pant and Machinery purchased on 1st January, Year 1 N600,000

Depreciation rate per anuum, 10%

Scrap value, N60,000.

Using reducing balance method, what is the net book value on 31st December of Yr. 2?

The correct answer is D. N486,000

No explanation given