Question

An equipment was purchased on 1st January, 2012 for Rs. 25,000 and is to be depreciated at 30% based on reducing balance method. If the company closes its books of account on 31st March every year, what would be the net book value-of the equipment as at 31 * December, 2013 ______________.

• A. Rs. 12,250
• B. Rs. 17,750
• C. Rs. 10,000
• D. Rs. 12,545.

Answer 1

The correct option is A Rs. 12,250

Value of Equipment as on 1st Jan $2012=Rs.25,000$
Less: Depreciation for the year $2012=7,500$
Total $=17,500$
Less: Depreciation for the year 2013(17,500 x 30%) $=5,250$
Net Book value of the Equipment $=Rs.12,250$