Question

An asset is subject to $10\%$ depreciation on reducing balance method. If the book value of the asset as on $\mathrm{31.03.14}$ is Rs. $40500$. The annual depreciation for the year $2013-14$ amounted to __________.

• A. Rs. $4,500$
• B. Rs. $4,050$
• C. Rs. $50,00$
• D. Rs. $48,00$

Answer 1

The correct option is A Rs. $4,500$

Book value on 31.03.14 = Rs. 40,500

Rate of depreciation = 10% on WDV

So, if 40,500 is 90% then how much will be the amount of annual depreciation on 31.03.13, i.e. 10% annual depreciation for the year 2013-14 = (Rs. 40,500 x 10)/90 = Rs. 4,500