Question

Cost of an asset Rs. 75,000. Useful life is 4 years. Find out the depreciation for the 1st year under sum of years digit method?

• A. Rs. 30,000
• B. Rs. 7,500
• C. Rs. 22,500
• D. Rs. 15,000

Answer 1

The correct option is A Rs. 30,000

Sum of years = 4 + 3 + 2+ 1

= 10

Depreciation = depreciable amount x no. of years remaining

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sum of years

= 75,000 x 4

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10

= RS-30,000.