Question

On the basis of following information answer the following question.

The balance in accumulated depreciation account of a company at the beginning of year $2008-2009$ was Rs$2,00,000$ when the original cost of the assets amounted to Rs$10,00,000$. The company charges $10\%$ depreciation on a SLM basis for all assets including those which have been either purchased or sold during the year. One such asset costing Rs.$5,00,000$ which accumulated depreciation as at the beginning of the year of Rs$80,000$ was disposed off during the year.

Depreciation from the current year = ?

• A. Rs$40,000$
• B. Rs$50,000$
• C. Rs$60,000$
• D. Rs$1,00,000$

Answer 1

The correct option is D Rs$1,00,000$

Depreciation for the current year = Opening balance x rate

= RS-10,00,000 x 10/100

= RS-1,00,000.