Question

An asset is purchased in 2020 at Rs.10,000. Calculate the book value of the asset after 2 years, when depreciation is charged @ 10% p.a. under the straight-line method.

• A. $Rs.8,100$
• B. $Rs.8,000$
• C. $Rs.9,000$
• D. $Rs.8,570$

Answer 1

The correct option is B $Rs.8,000$

Depreciation under straight line method and written down value method will be calculated as under:

SLM WDV Method

Cost of Assets: 10000 10000

Depreciation Year I @10% 1000 1000

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Balance 9000 9000

Depreciation Year II @10% 1000 900

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Balance after 2 years 8000 8100

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