Question

X Ltd. Purchased a machine on 1st Jan for Rs. 2,40,000. Installation expenses were Rs. 20,000. Residual value after 5 years Rs. 10,000. On 1st July, expenses for repairs were incurred to the extent of Rs. 4,000. Depreciation rate = 10% Depreciation for 4th year will be:

• A. Rs. 26,000
• B. Rs. 34,000
• C. Rs. 42,000
• D. Rs. 50,000

Answer 1

The correct option is A Rs. 26,000

Here , cost +installation charges =240000+20000=260000

In SLM method , depreciation for every year is same.

so, 260000*10%=26000

so for 4th year , it will be 26000