Use the following information to answeer questions below

Kako Ltd bought a machine for D 1,200,000 on 1st January 2018. Depreciation was provided annually at a rate of 10% using the diminishing balance method. The machine was sold for D 880,000 on 31st December 2021.

The profit or loss on disposal of the machine was

  • A D 280,000 profit
  • B D 87,480 loss
  • C D 320,000 loss
  • D D 92,680 profit
waec 2022accounting

The correct answer is B. D 87,480 loss

From 2018 to 2021( accounting year) is three (3) years
  D
Cost 1200000
Year 1 ( 10% x 1200000) 120000
  1080000
Year 2 ( 10% x 1080000) 108000
  972000
Year 3 ( 10% x 972000) 97200
Depreciation 874800
Previous question Next question