Date of Purchase 1st July, Purchase Price of Machine Rs. 80,000, Installation Charges Rs. 20,000. Residual Value Rs. 40,960. Useful life 4 years, Accounting year - Financial year.
The depreciation under SLM for the first year will be:
Date of Purchase 1st July, Purchase Price of Machine Rs. 80,000, Installation Charges Rs. 20,000. Residual Value Rs. 40,960. Useful life 4 years, Accounting year - Financial year.
The depreciation under SLM for the first year will be:
The correct option is D Rs. 11,070
Purchase
Price of Machine Rs. 80,000
Installation
Charges Rs. 20,000.
Cost = Purchase
Price of Machine + Installation Charges
= 80,000+20,000 = 100000
Residual
Value Rs. 40,960
Useful
life 4 years
Calculation
of depreciation at the end of 1st year
Depreciation
= Cost – Residual Value/ Estimated Useful life
=1,00,000-40,960/4
= 14760
Rate of
Depreciation = Annual Depreciation/Cost of machinery X 100
=14760/1,00,000 X 100
= 14.76%
Book
Value as on 31st March 1,00,000
Depreciation
@14.76%
(1,00,000
X 14.76% X 9/12) = 11070.
Purchase Price of Machine Rs. 80,000
Installation Charges Rs. 20,000.
Cost = Purchase Price of Machine + Installation Charges
= 80,000+20,000 = 100000
Residual Value Rs. 40,960
Useful life 4 years
Calculation of depreciation at the end of 1st year
Depreciation = Cost – Residual Value/ Estimated Useful life
=1,00,000-40,960/4
= 14760
Rate of Depreciation = Annual Depreciation/Cost of machinery X 100
=14760/1,00,000 X 100
= 14.76%
Book Value as on 31st March 1,00,000
Depreciation @14.76%
(1,00,000 X 14.76% X 9/12) = 11070.
