Question

M/s Ram Co. purchased Machinery on 1st April 2015 for $Rs.100000$
Depreciation under Straight Line Method $10$%.
Ascertain the Accumulated Depreciation balance as on 31st mar 2018.

• A. $Rs.25000$
• B. $Rs.30000$
• C. $Rs.10000$
• D. $Rs.50000$

Answer 1

The correct option is B $Rs.30000$

When the depreciation is charged by creating accumulated depreciation account, following journal entry is passed:

Depreciation A/c Dr.

To Accumulated Depreciation A/c

In the given situation, depreciation is charged @$10$% on $Rs.100000$ under straight line method, depreciation account will be debited every year by Rs.10000 and credited to accumulated depreciation a/c .

For F.Y. 2015-16 $Rs.10000$

For F.Y. 2016-17 $Rs.10000$

For F.Y. 2017-18 $Rs.10000$

Balance in accumulated depreciation account as on 31st March 2018 will be $Rs.30000$.