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प्रश्न
Give the formula to find out the amount and rate of depreciation under straight line method of depreciation.
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उत्तर
Amount of depreciation per year =
`("Original cost of the asset" - "Estimated scrap value")/"Estimated useful life of the asset in years"`
Rate of depreciation =
`"Amount of depreciation per year"/"Original cost" xx 100`
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संबंधित प्रश्न
Complete the following sentence:
Depreciation = `"Cost of asset - _____________"/"Estimated Working Life of the Asset"`
State the limitations of straight-line method of depreciation.
State the limitations of written down value method of depreciation.
On 1st July 2016 M/s. Ramai & Co. .sold Machinery for ₹ 7,000 the original cost of ₹ 10,000 which was purchased on 18th April 2015. Find out the profit or loss on sale of Machinery by charging depreciation at 10% p.a. on original cost on 31st March every year.
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 the Written Down Value Method, on 31st March every year.
Prepare Printing Machine Account for the first four years.
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 the Written Down Value Method, on 31st March every year.
Prepare Printing Machine Account for the first four years.
On 1st April 2015, Farid of Nasik purchased a Motor Car for ₹ 55,000. The scrap value of the Motor Car was estimated at ₹ 10,000 and its estimated life is 10 years. The Registration charge for the Motor Car was ₹ 5,000.
Show Motor Car Account for first four years, assuming that the books of accounts are closed on 31st March every year.
Which depreciation method helps a firm accumulate funds for replacing an asset after its useful life?
A company uses a method that results in high depreciation expense initially and lower in later years. This pattern benefits them because:
The Sum-of-the-Years’-Digits Method results in:
