Question

Date of Purchase of Machine 1.4.2012, Cost: Rs. 12,00,000, Rate of Depreciation: 10% p.a.on Written Down Value Method Basis. The closing balance of Provision for Depreciation Account as 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

Answer: (C)

Rs. 3,25,200

Closing balance of provision for depreciation account:-

= total depreciation on the machinery

= 1,20,000 + 1,08,000 + 97,200

= RS-3,25,200.

Working note:-

Depreciation for 1st year:-

= 12,00,000 x 10/100

= RS-1,20,000

Depreciation for the 2nd year :-

= (12,00,000 - 1,20,000) 10,80,000 x 10/100

= RS-1,08,000

Depreciation for the 3rd year :-

= (10,80,000 - 1,08,000) 9,72,000 x 10/100

= RS-97,200