A machine was purchased on 1st January 2013 for Rs 25,000 and is to be depreciated at 30 % p.a. based on reducing balance method. If the company closes books of account on 31st March every year, what would be the net book value of the equipment as at 31st December, 2014?
A machine was purchased on 1st January 2013 for Rs 25,000 and is to be depreciated at 30 % p.a. based on reducing balance method. If the company closes books of account on 31st March every year, what would be the net book value of the equipment as at 31st December, 2014?
The correct option is D Rs.12,545
Purchase
Price of Machine on 1.01.2013 = Rs 25,000
Rate of
Depreciation = 30% p.a
Calculation
of depreciation as at 31st December 2014
Original
cost as on 1.01.2013 = Rs 25,000
Less:
Depreciation at the end
as on
31.3.2013
(25,000 X
30% X 3/12) = Rs (1875)
Book
Value as on 1.01.2013 = Rs 23125
Less:
Depreciation at the end
On
31.3.2014 = Rs
(6937)
Book
Value on 31.12.2014 = Rs 16187.5
Less:
Depreciation till
31.12.2014 = Rs (3642.18)
Book
Value as at 31.12.2014 = Rs 12545.3
Purchase Price of Machine on 1.01.2013 = Rs 25,000
Rate of Depreciation = 30% p.a
Calculation of depreciation as at 31st December 2014
Original cost as on 1.01.2013 = Rs 25,000
Less: Depreciation at the end
as on 31.3.2013
(25,000 X 30% X 3/12) = Rs (1875)
Book Value as on 1.01.2013 = Rs 23125
Less: Depreciation at the end
On 31.3.2014 = Rs (6937)
Book Value on 31.12.2014 = Rs 16187.5
Less: Depreciation till
31.12.2014 = Rs (3642.18)
Book Value as at 31.12.2014 = Rs 12545.3
