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Analysing Comparative Statement of Profit and Loss

Original Cost...

Question

Original Cost = Rs. 1,00,000. Life = 5 years. Expected salvage value = Rs. 2,000
Rate of depreciation p.a.as per straight line method is _______.

A

20.0%

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B

19.8%

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C

19.6%

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D

19.4%

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Solution

The correct option is C 19.6%
Depreciation in SLM = cost of assets+Installation charges-scrap value/estimated useful life
=100000-2000/5
=98000/5
Annual depreciation=19600
Rate of depreciation = Annual depreciation 100/cost of assets
=19600100/100000
=19.6%

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