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प्रश्न
A firm purchased a plant for ₹ 40,000. Erection charges amounted to ₹ 2,000. The effective life of the plant is 5 years. Calculate the amount of depreciation per year under the straight-line method.
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उत्तर
Calculation of the amount of depreciation
Amount of depreciation = `("Original cost" - "Scrap value")/"Estimated life"`
Original cost = Purchase of plant + Erection charges
= ₹ 40,000 + ₹ 2,000 = ₹ 42,000
Estimated life = 5 years = `(₹ 42,000 - 0)/(5 "years")` = ₹ 8,400
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संबंधित प्रश्न
Answer in One Sentence only:
What is a ‘Scrap Value’ of an asset?
Write the word/term/phrase which can substitute the following statement:
The method of depreciation in which the rate of depreciation is fixed but the amount of depreciation reduces every year.
Select the most appropriate answer from the alternatives given below and rewrite the sentence:
Depreciation is charged only on ______ assets.
State whether the following statement is True or False with reasons:
Depreciation need not be charged when business is making losses.
Complete the following sentence:
Depreciation Account is a ______ account.
State the advantages of straight-line method of depreciation.
Distinguish between straight-line method and written down value method of providing depreciation.
An asset is purchased for ₹ 50,000. The rate of depreciation is 15% p.a. Calculate the annual depreciation for the first two years under the diminishing balance method.
If the cost of the Computer is ₹ 40,000 and depreciation is to be charged at 8% p.a. Calculate the amount of depreciation.
M/s Omkar Enterprise Jalgaon acquired a Printing Machine for ₹ 75,000 on 1 Oct 2015 and spent ₹ 5,000 on its transport and installation. Another Machine for ₹ 45,000 was purchased on 1st Jan 2017. Depreciation is charged at the rate of 20% on Written Down Value Method, on 31st march every year.
Prepare Printing Machine Account for the first four years.
