Original cost of asset : 80,000 scrap value : 10,000 Life of asset : 10 years
calculate annual depreciation ______.

7000

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5000

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8000

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None

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Solution

The correct option is A 7000
Depreciation has been defines as "the diminution in the utility or value of an asset, due to natural wear and tear, exhaustio of the subject matter, effluxion of time accident, etc. There are various methods of calcuating depreciation .
Formula for depreciation when scrap value is given and rate of depreciation is not given is:
Depreciation = (Original cost - Scrap value) / Useful life of asset
In the given question,
Original cost of asset = Rs. 80000
Scrap value = Rs. 10000
useful life of asset = 10 Years
Depreciation = Rs. (80000 - 10000) / 10
Depreciation = Rs. 7000

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Original cost of asset : 80,000 scrap value : 10,000 Life of asset : 10 years calculate annual depreciation ______.

Original cost of asset : 80,000 scrap value : 10,000 Life of asset : 10 years
calculate annual depreciation ______.