Assuming the following information was extracted from the records of UMz & Co.
- Purchased a motor vehicle on 1st January, 2010 for N5m
- Expected useful life of the motor vehicle is 8years
- Residual value is estimated to be N1.2m
You are required to determine the annual depreciation chargeable to income statement of UMz & Co.
Suggested solution
- Purchased a motor vehicle on 1st January, 2010 for N5m
- Expected useful life of the motor vehicle is 8years
- Residual value is estimated to be N1.2m
You are required to determine the annual depreciation chargeable to income statement of UMz & Co.
Suggested solution
From the information given above, we extract as follows
Thus, as can be seen above, the yearly depreciation amount is UMz & Co. will charge to its income statement is N475,000
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