On October 01.2012 two machines costing Rs. 40,000 and Rs. 30,000 respectively, were purchased. On March 31,2016 both the machines had to be discarded because of damage and had to be replaced by two machines costing Rs. 50,000 and Rs. 40,000 respectively.
One of the discards machine was sold for Rs. 12,000 and against the other it was expected that Rs. 10,000 would be realized. The firm provides depreciation @ 15% on written down value
The total amount of depreciation written off on the two machines till they were discarded is _______.

Rs. 42,000

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Rs. 30,236

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Rs. 27,190

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Rs. 36,388

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Solution

The correct option is B Rs. 30,236
Total depreciation on machine (40,000 + 30,000)
= depreciation from 1.10.2012 to 31.03.2016
= 5,250 + 9,712.5 + 8,255.625 + 7,017.28
=RS-30,235.405 or 30,236

Working notes:-
Depreciation for the year 12-13:-
= 70,000 x 15/100 x 6/12 (October to march)
= RS-5,250.
Depreciation for the year 13-14:-
= (70,000 - 5,250) 64750 x 15/100
= RS- 9712.5
Depreciation for the year 14-15 :-
= (64,750 - 9,712.5) 55,037.5 x 15/100
= RS-8,255.625
Depreciation for the year 15-16:-
= (55,037.5 - 8,255.625) 46,781.875 x 15/100
= RS-7,017.28

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