Question

Asset purchase on 1st April 2012 at Rs.100000. Calculate the amount of asset on 1st April 2017, depreciation @ 20% p.a. under the straight-line method.

• A. Rs. 0
• B. Rs. 20000
• C. Rs. 40000
• D. Rs. 50000

Answer 1

Answer: (A)

Rs. 0

Purchase Price of Asset = 100,000
Depreciation = 20%

Depreciation amount = 100,000x20% = 20,000
Total Depreciation for 5 years (i.e., 1st April 2012 to 1st April 2017) = 20,000 x 5 years
= 100,000
Therefore, the Value of asset as on 1st April 2017 = Purchase Price (1st April 2012) - Depreciation for 5 years.
= 100,000 - 100, 000

= 0