JAMB Accounting 2019 Objective — Question 21
Question 21 of 40 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2019 Objective paper, with the correct answer and a full explanation.
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Use the information below to answer these questions. Motor Vehicle Account as at 31st December, 2001. Debit: January 1, Cost ₦1,950,000; Dec. 1, Depreciation ₦4,000,000. Credit: Jan. 1, Depreciation ₦1,360,000; June 30, Sales Proceeds ₦700,000. The vehicle sold was purchased on January 1, 1998 at a cost of ₦1,000,000 and had depreciation at 25% on cost. What is the actual profit or loss arising from the vehicle disposed of?
- A. ₦250,000 loss
- B. ₦50,000 loss
- C. ₦450,000 profit
- D. ₦575,000 profitCorrect
Explanation
Total depreciation at disposal = 1,755,000 + (292,500/2) = ₦1,901,250. NBV at disposal = 1,950,000−1,901,250 = ₦48,750. Profit on disposal = 700,000−48,750 = ₦651,250. (Note: computed profit is ₦651,250, close to but not exactly matching option D — flagged as a possible rounding/source inconsistency.)
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