Question

Original cost =Rs. $1,30,000$; Salvage value $=4000$; Useful life $=6$ years. Depreciation for the fourth year under sum-of-years digits method will be ____________.

• A. Rs. $6,000$
• B. Rs. $12,000$
• C. Rs. $18,000$
• D. Rs. $36,000$

Answer 1

The correct option is C Rs. $18,000$

Option C is correct.
Sum of years = 1+2+3+4+5+6 = 21
Original Cost = 1,30,000
Salvage Value = 4,000

= 1,26,000
Depreciation = 1,26,000*3/21
= 18,000.