Assignments

1. Consider a piece of equipment that costs N5 million with an estimated useful life of 20
years and N0 salvage value. Calculate the depreciation expense per year for this
equipment. If the same piece of equipment has an estimated salvage value of N500,000
for a useful life of just 10 years. Calculate the straight line depreciation annually for the
equipment.

2. Sandel Engineering Nig. bought a Lathe Machine for # 5 million four years ago. It was
assumed that as at the time of acquisition of the machine it has 20 years useful life
span. After the fourth year and now in the fifth year, as a result of new information and
newest technology it was discovered that the remaining useful life of the asset is only 12
years. Calculate the depreciation charge using the revised useful life and set up the
schedule.

3. Consider a piece of agricultural land with irrigation and processing facilities that costs
$625,000 with an estimated useful life of 15 years and a $12,500 salvage value.
Calculate the double-declining balance depreciation and set up a 15 year schedule for
the asset.

David Okunade
8th June 2021.