Question

Original cost= Rs. 1,26,000. Salvage value = Rs. 6,000. If unit produced in 2nd year was 5,000 and total estimated production 50,000. Depreciation for 2 nd year is ____________ .

• A. 10,800
• B. 11,340
• C. 12,600
• D. 12,000

Answer 1

The correct option is D 12,000

Depreciation = Original cost - salvage value

------------------------------------------- x 2nd year production

Total production

= 1,26,000 - 6,000

--------------------------- x 5,000

50,000

= RS-12,000