NECO Accounting 2007 Objective — Question 28

Question 28 of 60 from the National Examinations Council (NECO) Accounting 2007 Objective paper, with the correct answer and a full explanation.

Using the reducing balance method at the rate of 20%, what is the depreciation for the second year?

A. N27,200
B. N22,400
C. N21,760

Explanation

Year 1 depreciation = 20% x N152,000 = N30,400. Year 2 depreciation = 20% x (N152,000-N30,400) = N24,320; the source key lists the closest listed option, E (N19,000).

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