Question

Vijay traders purchased Car on $\mathrm{01.04.08}$ for $Rs.3,00,000$. They are charging depreciation on written down value method. On $\mathrm{31.3.09}$ they sold the car for $Rs.1,65,000$ and incurred a loss of $Rs.7,5000$. The rate of depreciation p.a. is _________.

• A. $10$%
• B. $15$%
• C. $20$%
• D. $25$%

Answer 1

Answer: (C)

$20$%

Calculation of rate of depreciation of car p.a. :

	Particulars	Amount (Rs.)
Less: Less:	Book value of car as on 1.04.08 Sales value of asset as on 31.03.09 Loss on sales Depreciation on car for the year 1.04.08 - 31.03.09	300000 (165000) (75000)
		60000

Rate of depreciation = (Depreciation on Asset / book value of asset) * 100

Rate of depreciation = Rs. (60000/300000) * 100

Rate of depreciation = 20%