N.Ltd, purchased machine for Rs 1,00,000 on 1.1.2012. Installation expenses were Rs 10,000. Life of the asset is 5 years at the end of which asset can be sold at Rs 5,000. Depreciation rate is 15% on WDV. Depreciation for 4th year = Rs?.

9, 212

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9, 673

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10, 594

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10, 133

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Solution

The correct option is D $10, 133$
Depreciation for 4th year :-
= 67553.75 x 15/100
= 10,133.

Working notes :-
1) Value of machinery = 1,00,000 + 10,000
= 1,10,000.
1st year depreciation :-
= 1,10,000 x 15/100
= 16,500.
2nd year depreciation :-
= (1,10,000 - 16,500) 93,500 x 15/100
= 14,025
3rd year depreciation :-
= (93500 - 14,025) 79,475 x 15/100
= 11,921.25.

2) WDV of machinery at the beginning of 4th year =
= 1,10,000 - 16,500 - 14,025 - 11,921,25
= 67,553.75.

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N.Ltd, purchased machine for Rs 1,00,000 on 1.1.2012. Installation expenses were Rs 10,000. Life of the asset is 5 years at the end of which asset can be sold at Rs 5,000. Depreciation rate is 15% on WDV. Depreciation for 4th year = Rs______?______.

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