Question

The original cost of the asset is Rs. 6,00,000 and depreciation is charged @ 10% p.a. at written down value, then the amount of depreciation in 3rd year will be :

• A. Rs.54000
• B. Rs.48600
• C. Rs.60000
• D. Rs.49000

Answer 1

The correct option is B Rs.48600

Under written down value of method of charging depreciation, depeciation is calculated on WDV as follows:

Original cost Rs. 600000

Less : Depreciation @ 10% p.a. (60000)

Written Down Value 540000

Less : Depreciation @ 10% p.a. (54000)

Written Down Value 486000

Less : Depreciation @ 10% p.a. (48600)

Written Down Value 497400

Depreciation in third year under WDV method is Rs. 48600