Question

An asset is subject to $10\%$ depreciation on reducing balance method. If the book value of the asset as on $\mathrm{31.03.13}$ is Rs. $45000$. The annual depreciation for the year $2014-15$ amounted to _________.

• A. Rs. $4500$
• B. Rs. $4050$
• C. Rs. $5000$
• D. Rs. $4800$

Answer 1

Answer: (B)

Rs. $4050$

rate of depreciation = 10% on WDV

The book value of the asset as on 31.03.13 is Rs. 45,000

Annual depreciation for the year 2014 is = 10% x Rs. 45,000 = Rs. 4,500

The book value of the asset as on 31.03.14 = Rs. 45,000 - Rs. 4,500 = Rs. 40,500

Annual depreciation for the year 2015 is = 10% x Rs. 40,500 = Rs. 4.050