Question

# Amit Ltd. purchased a machine on 01.01.2013 for Rs. 1,20,000. Installation expenses were Rs. 10,000. Residual value after 5 years is Rs. 5,000. Rate of depreciation is 10% on WDV basis. Depreciation for 4th year = _________.

A

Rs. 12,500

No worries! Weâ€˜ve got your back. Try BYJUâ€˜S free classes today!
B

Rs. 11,250

No worries! Weâ€˜ve got your back. Try BYJUâ€˜S free classes today!
C

Rs. 10,125

No worries! Weâ€˜ve got your back. Try BYJUâ€˜S free classes today!
D

Rs. 9,477

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
Open in App
Solution

## The correct option is D Rs. 9,477 Value of machinery = Rs. 1,20,000 + Rs. 10,000 = Rs. 1,30,000. 1st year depreciation = Rs. 1,30,000 x 10/100 = Rs. 13,000. 2nd year depreciation = Rs. (1,30,000 - 13,000) x 10/100 = Rs. 1,17,000 x 10/100 = Rs. 11,700. 3rd year depreciation = Rs. (1,17,000 - 11,700) x 10/100 = Rs. 1,05,300 x 10/100 = Rs. 10,530. WDV of machinery at the beginning of 4th year = = Rs. 1,05,300 - Rs. 10,530 = Rs. 94,770. Depreciation for 4th year = Rs. 94,770 x 10/100 = Rs. 9,477.

Suggest Corrections
2
Join BYJU'S Learning Program
Related Videos
Methods of Depreciation
ACCOUNTANCY
Watch in App
Join BYJU'S Learning Program