Question

$ABC$ Industries Ltd. purchased a new Machinery on $1-1-2011$ for $2,75,000$ and spent $Rs.25,000$ on its installation. Machine is subject to $10$% depreciation on the original cost. The company sold the Machinery on $31-12-2015$ for $Rs.1,45,000$. Find out the accumulated depreciation on the Machine as on $31-12-2015$.

• A. $Rs.1,25,000$
• B. $Rs.1,35,000$
• C. $Rs.1,05,000$
• D. $Rs.1,50,000$

Answer 1

The correct option is D $Rs.1,50,000$

Purchase cost of Machinery on $1-1-2011(2,75,000+25,000)=3,00,000$
$Depreciation=3,00,000\times 10$% $=30,000$.
Accumulated depreciation for $5$ years $=30,000\times 5=1,50,000$.