WAEC Book Keeping 2024 Objective — Question 10

Question 10 of 40 from the West African Examinations Council (WAEC) Book Keeping 2024 Objective paper, with the correct answer and a full explanation.

10. (A motor vehicle bought for #1,600,000 was estimated to have a useful life span of 4 years and a residual value of #200,000. The straight line method of calculating depreciation is used. The motor vehicle is sold at the end of the fourth year for #250,000.) The net book value at the end of the third year is A.

A. 1,200,000.
B. 1,050,000.
C. 550,000.Correct
D. 400,000.

Explanation

Depreciation = (cost-scrap value)/4 = (1,600,000-200,000)/4 = 350,000. Depreciation for 3yrs = 350,000x3=1,050,000. Net book value at end of 3rd year = 1,600,000-1,050,000=550,000.

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