Question

Original cost of an asset was Rs. $1,00,000$. Life 5 years. Expected salvage value was Rs. 5,000. Hence Depreciation for 3rd year as per straight line method is ___________.

• A. Rs. $8,550$
• B. Rs. $20,000$
• C. Rs. $19,000$
• D. Rs. $26,250$

Answer 1

The correct option is C Rs. $19,000$

Option C is correct. In straight line method, depreciation charged remains same for every year. Depreciation is calculated as:
Cost price - salvage value / Estimated life of depreciation
1,00,000 - 5000 /5
= 19000
Depreciation for 3rd year will be - 19000.