Question

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 $31$st March $2014$ from the following particulars.
(a) Loose tools in hand as on $1$st April $2013$-Rs. $2,800$
Loose tools manufactured during $2013-14$- Rs. $7,500$
Loose tools revalued as on $31-3-2014$ - Rs. $9,500$.

• A. Rs. $800$
• B. Rs. $1,000$
• C. Rs. $1,100$
• D. Rs. $900$

Answer 1

The correct option is A Rs. $800$

Annual depreciation charge = (loose tools on hand + loose tools manufactured during the year) - loose tool revalued

Annual depreciation charge = (Rs. 2,800 + Rs. 7,500) - RS. 9,500

Annual depreciation charge = Rs. 800