Question

Original cost =Rs. $12,00,000$. Salvage value =Rs. $2,00,000$. Useful Life$=10$ years. Annual depreciation = ? and rate of depreciation = ?

• A. Rs. $1,00,000$ and $10$%
• B. Rs. $1,00,000$ and $8.33$%
• C. Rs. $1,20,000$ and $12$%
• D. Rs. $1,20,000$ and $8.33$%

Answer 1

Answer: (B)

Rs. $1,00,000$ and $8.33$%

Cost price = 12,00,000
Salvage value = 2,00,000
Useful life = 10 years.
Depreciation = Cost Price - Salvage value / Useful life

= 12,00,000 - 2,00,000 /10

= 1,00,000.
Rate of depreciation = 1,00,000/12,00,000*100
= 8.33% .