Excel Enterprises purchased a plant having estimated useful life of $10$ years, however after $5$ years the remaining life of the asset is revised to $3$ years. Rs. $24, 000$ being the remaining depreciable amount. The annual depreciation charge after revaluation of remaining life will be ____________.

R s .8, 000

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R s .4, 800

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R s .6, 000

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R s .8, 500

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Solution

The correct option is A $R s .8, 000$
After the expiry of 5 years, the remaining life of the asset is revised to 3 years. Book value of the asset amount to Rs.24000 which need to be depreciated in the next 3 years.
Hence 1/3 of the book value i.e. Rs.8000 to be charged to depreciation every year.

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Excel Enterprises purchased a plant having estimated useful life of 10 years, however after 5 years the remaining life of the asset is revised to 3 years. Rs. 24,000 being the remaining depreciable amount. The annual depreciation charge after revaluation of remaining life will be ____________.

The correct option is A Rs.8,000After the expiry of 5 years, the remaining life of the asset is revised to 3 years. Book value of the asset amount to Rs.24000 which need to be depreciated in the next 3 years. Hence 1/3 of the book value i.e. Rs.8000 to be charged to depreciation every year.

The correct option is A $R s .8, 000$
After the expiry of 5 years, the remaining life of the asset is revised to 3 years. Book value of the asset amount to Rs.24000 which need to be depreciated in the next 3 years.
Hence 1/3 of the book value i.e. Rs.8000 to be charged to depreciation every year.