Question

Date of Purchase of Machine 1.4.2012, cost: Rs. 12,00,000, Rate of Depreciation: 10% p.a. on Staright Line Basis. The closing balance of Provision for Depreciation Account as at 31.3.2015 will be:

• A. Rs. 1,20,000
• B. Rs. 2,28,000
• C. Rs. 3.25,200
• D. Rs. 3,60,000

Answer 1

The correct option is D Rs. 3,60,000

Closing balance of provision for depreciation account:-

= total depreciation on the machinery

= Depreciation for the 3 years( 1st April 2012 to 31st march 2015)

= 12,00,000 x 10/100 x 3 years

= RS-3,60,000.