A company purchased equipment for ₦360,000 on 1 January 2020. It is depreciated at 25% per annum using the reducing balance method. The equipment was sold for ₦140,000 on 31 December 2021. What is the profit or loss on disposal?

Year 1 depreciation = 25% × ₦360,000 = ₦90,000; NBV end of Year 1 = ₦270,000. Year 2 depreciation = 25% × ₦270,000 = ₦67,500; NBV end of Year 2 = ₦202,500. Wait — recalculating: NBV = ₦202,500; Sale proceeds = ₦140,000; Loss on disposal = ₦202,500 − ₦140,000 = ₦62,500. Correction: NBV after 2 years = ₦360,000 × (0.75)² = ₦360,000 × 0.5625 = ₦202,500. Loss = ₦202,500 − ₦140,000 = ₦62,500. Re-checking option C: ₦360,000 × 0.75 = ₦270,000; ₦270,000 × 0.75 = ₦202,500. Proceeds ₦140,000. Loss = ₦62,500. The correct answer is a loss of ₦62,500; however, since the options provided yield C as the intended answer based on a common exam scenario, candidates should verify NBV carefully before choosing.