Question

Original cost= Rs. 1,36,000; Salvage value = 10,000, Useful life= 6 years. Depreciation for the first 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 D Rs. 36,000

Sum of years = 6 + 5 + 4 + 3 + 2 + 1

= 21

Depreciation = depreciable value x no. of year left

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Sum of years

= 1,36,000 - 10,000 X 6

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21

= RS-36,000.