- 1 Marks
Question
The following data relate to an equipment acquired by an enterprise:
- Cost: N435,600
- Expected useful life: 4 years
- Annual depreciation: N100,000
What is the residual value of the equipment at the end of its useful life?
A. N35,000
B. N35,600
C. N73,500
D. N83,750
E. N108,000
Answer
B
Explanation:
The equipment cost is N435,600, and after 4 years of depreciation at N100,000 per year (total N400,000), the residual value is the difference between the original cost and the total depreciation: N435,600 – N400,000 = N35,600. Therefore, the correct answer is option B.
- Tags: Depreciation, Equipment Valuation, Residual Value
- Level: Level 1
- Series: MAY 2012
- Uploader: Theophilus