Question

Rate of depreciation under written down value method is 15% p.a. Cost of the machinery is Rs. 10,00,000. Residual value at the end of useful life is Rs. 20,000. Depreciation for the first year will be:

• A. Rs. 1,50,000
• B. Rs. 1,20,000
• C. Rs. 1,00,000
• D. Rs. 80,000

Answer 1

The correct option is A Rs. 1,50,000

Depreciation for the 1st year = Depreciable value x rate of depreciation

= 10,00,000 x 15/100

= RS-1,50,000