You visited us 1 times! Enjoying our articles? Unlock Full Access!

Byju's Answer

Standard XII

Accountancy

Cash Flow from Investing Activities

On 1st Janu...

Question

On $1^{s t}$ January, 2006 A Ltd purchased a machine for Rs 50,000 and spent Rs 4,000 on its carriage and Rs. 2000 on its installation. Its useful life is 10 years and scrap is Rs. 6000. Depreciation for the year under fixed installment method will be:

Rs. 4,600

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Rs. 5,000

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Rs. 4,800

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Rs. 4,500

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is B Rs. 5,000
Depreciation(SLM Method) = Cost - scrap value
---------------------------
Useful life
= 56,000 - 6,000
-----------------------
10
= RS. 5,000.

Suggest Corrections

Similar questions

Q. A company purchased new Machine for Rs.

50, 000

1

st April and spent Rs.

10, 000

on its installation and Rs.

5, 000

on transportation. The useful life of the machine is estimated

10

years. The firm provides depreciation using sum of years digit method. What is the depreciation for the last year of working life of the machine?

Q. Question : On April

1, 2000

, Bajrang Marbles purchased a Machine for Rs.

2, 80, 000

and spent Rs.

10, 000

on its carriage and Rs.

10, 000

on it installation. It is estimated that its working life is

10

years and after

10

years its scrap value will be Rs

20, 000

.
(a) Prepare Machine account and Depreciation account for the first four years by providing depreciation on straight line method Accounts are closed on March

31^{s t}

every year.
(b) Prepare Machine account, Depreciation account and Provision for depreciation account (or accumulated depreciation account) for the first four years by providing depreciation using straight line method. Accounts are closed on March

31^{s t}

every year.

On April 1, 2000, Bajrang Marbles purchased a Machine for Rs 2,80,000 and spent Rs 10,000 on its carriage and Rs 10,000 on its installation. It is estimated that its working life is 10 years and after 10 years its scrap value will be Rs 20,000.

(a) Prepare Machine account and Depreciation account for the first four years by providing depreciation on the straight-line method. Accounts are closed on March 31 st every year.

(b) Prepare Machine account, Depreciation account and Provision for depreciation account (or accumulated depreciation account) for the first four years by providing depreciation using the straight-line method. Accounts are closed on March 31 st every year.

Reliance Ltd purchased a second-hand machine for Rs. 56,000 on 1st October 2014 and spent Rs. 28,000 on its overhaul and installation before putting it to operation. It is expected that the machine can be sold for Rs. 5,000 at the end of its useful life of 15 years. Moreover, an estimated account and provision for depreciation account for the first 3 years charging depreciation by fixed installment method. Accounts are closed on 31st december every year.

Ganga Ltd purchased a machinery on January 1, 2001, for Rs 5,50,000 and spent Rs 50,000 on its installation. On September 1, 2001, it purchased another machine for Rs 3,70,000. On May 01, 2002 it purchased another machine for Rs 8,40,000 (including installation expenses).

Depreciation was provided on machinery @ $10 %$ per annum on original cost method annually on December 31. Prepare

(a) Machinery account and Depreciation account for the years 2001, 2002, 2003 and 2004.

(b) If depreciation is accumulated in the provision for Depreciation account, then prepare Machine account and Provision for depreciation account for the years 2001, 2002, 2003 and 2004.

Join BYJU'S Learning Program

On 1st January, 2006 A Ltd purchased a machine for Rs 50,000 and spent Rs 4,000 on its carriage and Rs. 2000 on its installation. Its useful life is 10 years and scrap is Rs. 6000. Depreciation for the year under fixed installment method will be:

The correct option is B Rs. 5,000Depreciation(SLM Method) = Cost - scrap value --------------------------- Useful life = 56,000 - 6,000 ----------------------- 10 = RS. 5,000.

On $1^{s t}$ January, 2006 A Ltd purchased a machine for Rs 50,000 and spent Rs 4,000 on its carriage and Rs. 2000 on its installation. Its useful life is 10 years and scrap is Rs. 6000. Depreciation for the year under fixed installment method will be:

The correct option is B Rs. 5,000
Depreciation(SLM Method) = Cost - scrap value
---------------------------
Useful life
= 56,000 - 6,000
-----------------------
10
= RS. 5,000.