Question

Original cost = Rs 2,01,600. Salvage value = Rs 9,600. Depreciation for 2nd year by machine hour rate method, if hours for 2nd year was 8,000 and total estimated hours are 80,000.

• A. Rs$19,000$
• B. Rs.$21,120$
• C. Rs.$20,160$
• D. Rs$19,200$

Answer 1

The correct option is D Rs$19,200$

Depreciation = Cost of the asset - salvage value

---------------------------------------------------- x no. of hours worked

total estimated hours

= 2,01,600 - 9,600

-------------------------- x 8,000

80,000

= RS-19,200.