Question

A & C Ltd. manufacturing loose tools and spare parts for its own use at the each of each year depreciation is charged on revaluation method. What would be the annual depreciation charge for the year ending $31$st March, $2014$ from the following particulars:
(a) Loose tools in hand as on $1$st April, $2013$-Rs. $5100$.
Loose tools manufacturing during $2012-13$- Rs. $8,000$.
Loose tools revalued as on $31-3-2014$ - Rs. $9,100$.

• A. $Rs.4,000$
• B. $Rs.3,500$
• C. $Rs.3,100$
• D. $Rs.1,900$

Answer 1

Answer: (A)

$Rs.4,000$

Annual depreciation charge = (loose tools on hand + loose tools manufactured during the year) - loose tool revalued

Annual depreciation charge = (Rs. 5,100 + Rs. 8,000) - RS. 9,100

Annual depreciation charge = Rs. 4,000