EVALUATION OF DEPRECIATION METHOD USED BY MANUFACTURING FIRMS AND ITS EFFECTS ON PROFITABILITY (A CASE STUDY OF AMACO LIMITED, ENUGU)

This project is aimed at evaluating the different depreciation methods used by manufacturing firms and its effects on profitability (a case study of Amaco Ltd, Enugu). The population sample of this study is made up of personal staff of the company used. Data for this study was gathered from primary and secondary sources. Primary data was obtained by personal interviews while secondary data was gathered by means of questionnaires. Two research questions were developed and tested in this study. The analytical method formed on appropriate method here percentage and chi-square method was used to solidify conclusion. From the study, it was found that from costing view on depreciation that there is no costing treatment, an expense account normally opened and code number is given to facilitate easy identification. It was also discovered that the salvage value under all other method of depreciation are equal to one another except for the declining balance method, where the value is not compared with others. In consideration of these findings, it is therefore used in their ledger account so that a fair share of the account opened where all asset should be entered and the sum total of calculated depreciated charged to this accounts, so as to reduce clerical work. Finally, whatever the depreciation method chosen by company, there must be continuous revision of depreciation rate