a) Distinguish between the Straight-Line Method and the Reducing Balance Method of depreciation, stating ONE advantage of each method. (6 marks)
b) Eze Enterprises purchased a delivery van on 1st January 2020 for ₦600,000. The company's policy is to depreciate the van at 20% per annum using the Reducing Balance Method. On 31st December 2022, the van was sold for ₦280,000.
i) Calculate the depreciation charge for each of the three years 2020, 2021, and 2022. (6 marks)
ii) Calculate the profit or loss on disposal of the van. (4 marks)
iii) Show the Disposal Account. (4 marks)

Question

a) Distinguish between the Straight-Line Method and the Reducing Balance Method of depreciation, stating ONE advantage of each method. (6 marks)
b) Eze Enterprises purchased a delivery van on 1st January 2020 for ₦600,000. The company's policy is to depreciate the van at 20% per annum using the Reducing Balance Method. On 31st December 2022, the van was sold for ₦280,000.
   i) Calculate the depreciation charge for each of the three years 2020, 2021, and 2022. (6 marks)
   ii) Calculate the profit or loss on disposal of the van. (4 marks)
   iii) Show the Disposal Account. (4 marks)

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