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Analysing Comparative Statement of Profit and Loss

For loose too...

Question

For loose tools which method of depreciation is more appropriate

A

annuity method

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B

Reducing balance method

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C

production method

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D

revaluation method

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Solution

The correct option is D revaluation method
Revaluation depreciation method is used to calculate depreciation of assets, when small and indentifiable assets of low value but having a value which are called loose tools.
Therefore option D is correct.

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Similar questions

Q. Goa Sales Ltd. manufactures loose tools and spare parts for its own use. At the end of each year depreciation is charged on revaluation method. What would be the annual depreciation charge for the year ending

31

2014

from the following particulars.
(a) Loose tools in hand as on

1

2013

2, 800

Loose tools manufactured during

2013 - 14

7, 500

Loose tools revalued as on

31 - 3 - 2014

9, 500

.

Q. A & C Ltd. manufacturing loose tools and spare parts for its own use at the each of each year depreciation is charged on revaluation method. What would be the annual depreciation charge for the year ending

31

2014

from the following particulars:
(a) Loose tools in hand as on

1

2013

5100

.
Loose tools manufacturing during

2012 - 13

8, 000

.
Loose tools revalued as on

31 - 3 - 2014

9, 100

.

Q. For providing depreciation on hand tools, the appropriate method of depreciation is ___________.

Q. A diminishing balance method of providing for depreciation is one according to which ______________.

Q. Reducing balance method of depreciation is ____________.

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