a) Define depreciation and state THREE causes of depreciation of fixed assets. (5 marks)
b) A company purchased a machine on 1st January 2019 for ₦480,000. The machine has an estimated useful life of 5 years and a residual value of ₦30,000. The company uses the Straight-Line Method of depreciation.
i) Calculate the annual depreciation charge. (2 marks)
ii) Prepare the Machine Account and the Provision for Depreciation Account for the first THREE years (2019, 2020, 2021). (8 marks)

Question

a) Define depreciation and state THREE causes of depreciation of fixed assets. (5 marks)
b) A company purchased a machine on 1st January 2019 for ₦480,000. The machine has an estimated useful life of 5 years and a residual value of ₦30,000. The company uses the Straight-Line Method of depreciation.
   i) Calculate the annual depreciation charge. (2 marks)
   ii) Prepare the Machine Account and the Provision for Depreciation Account for the first THREE years (2019, 2020, 2021). (8 marks)

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