Chetan International Ltd. acquired a machine costing Rs. $50, 000$ having estimate useful life of 5 years. The expected salvage value of the machine after 5 years is Rs. $5, 000$ . Calculate rate of depreciation according to Double Declining Method.

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Solution

Rate of depreciation under Double Declining method =
Straight line Depreciation rate2
Under Straight Line Method, Depreciation =
cost of asset - Salvage value / estimated life of asset
50000 - 5000/5 = 9000.
Depreciation rate = 9000/50000100 = 18%
Rate of depreciation under Double Declining Method
18*2 = 36%

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Chetan International Ltd. acquired a machine costing Rs. 50,000 having estimate useful life of 5 years. The expected salvage value of the machine after 5 years is Rs. 5,000. Calculate rate of depreciation according to Double Declining Method.

Chetan International Ltd. acquired a machine costing Rs. $50, 000$ having estimate useful life of 5 years. The expected salvage value of the machine after 5 years is Rs. $5, 000$ . Calculate rate of depreciation according to Double Declining Method.