In the year of the sale, profit was?

An equipment costing N60,000 was bought on 1st January 1991. Depreciation was provided at 20 percent annually on a straight-line method. It was a straight-line method. it was sold on 30th June 1994 for N15,750. In the year of the sale, profit was

A. reduced by N15,750
B. increased by N15,750
C. reduced by N12,000
D. increased by N2,250
E. reduced by N2,250

Correct Answer:

Option C – reduced by N12,000