Question

Life of an asset is 5 years, Purchase cost - Rs 5,70,000 Installation charges - Rs 30,000 Depreciation as per sum of years digit method for 4th year =_____.

• A. $1,60,000$
• B. $40,000$
• C. $2,00,000$
• D. $80,000$

Answer 1

The correct option is D $80,000$

Sum of the years = 5 + 4 + 3 + 2 + 1

= 15

Depreciable amount = 70,000 + 30,000

= 1,00,000.

Depreciation = depreciable amount x no. of years remaining

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sum of years

= 6,00,000 x 2

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15

= RS-80,000.