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Question
A machine costing ₹ 23,000 is estimated to have a life of 7 years and the scrap value is estimated at ₹ 2,000 at the end of its useful life. Find out the amount of depreciation p.a.
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Solution
Depreciation p.a. = `"Cost of Asset (−) Scrapvalue" / "Estimated life of asset" `
= `"23,000 − 2,000"/7`
= `"21,000"/7`
= ₹ 3,000 p.a.
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