Question

Suraj Ltd. purchased a machine on 1.1.2003 for Rs 1,20,000. Installation expenses were Rs 10,000. Residual value after 5 years Rs 5,000. On 1.7.2003, expenses for repairs were incurred to the extent of Rs 2000. Depreciation is provided under straight line method. Depreciation rate = 10%. Annual Depreciation = _________

• A. Rs 13,000
• B. Rs 17,000
• C. Rs 21,000
• D. Rs 25,000

Answer 1

The correct option is A Rs 13,000

Option A is the correct one.

here rate of depreciation given as 10% p.a.

Cost of assets 120000+Installation exp 10000=130000

130000*10%=13000

Note:repairs on machinery are revenue expenses not included in the cost of assets.