Question

The written down value of machine on 31 st March, 2013 is Rs. 72,900. The machine was purchased on 1st April, 2010. Depreciation is being charged @ 10% p.a. by diminishing balance method. The cost price of the machine would be:

• A. Rs. 1,00,000
• B. Rs. 81 ,000
• C. Rs. 90,000
• D. Rs. 72,900

Answer 1

The correct option is A Rs. 1,00,000

Cost price of Machine = $\frac{72,900}{(1-10{)}^3}\ast 100=\frac{72,900}{9^3}\ast 100$
= Rs. 1,00,000