Advertisements
Advertisements
Question
Select the most appropriate answer from the alternatives given below and rewrite the sentence:
The amount that a fixed asset is expected to realise on its disposal is known as ______
Options
Book value
Scrap value
Market value
Original value
Advertisements
Solution
The amount that a fixed asset is expected to realise on its disposal is known as Scrap value.
APPEARS IN
RELATED QUESTIONS
Answer in One Sentence only:
What is the formula to calculate depreciation by Straight Line Method?
Write the word/term/phrase which can substitute the following statement:
The period for which the asset remains in working condition.
Write the word/term/phrase which can substitute the following statement:
The method of depreciation in which the total depreciation is equally spread over the life of the asset.
Write the word/term/phrase which can substitute the following statement:
The type of asset on which depreciation is charged.
Select the most appropriate answer from the alternatives given below and rewrite the sentence:
The amount of depreciation reduces year after year under ______
State whether the following statement is True or False with reasons:
The Profit or Loss on sale of fixed asset is ascertained only after charging depreciation.
State whether the following statement is True or False with reasons:
Wages paid for installation of Machinery are debited to Wages A/c.
Do you agree or disagree with the following statement:
By charging depreciation on fixed assets ascertainment of true and fair financial position is possible.
Complete the following sentence:
The amount spent on installation of Machinery is a ______ expenditure.
Complete the following sentence:
Depreciation Account is a ______ account.
If the total charge of depreciation and maintenance cost are considered, the method that provides a uniform charge is ______.
Under the written-down value method of depreciation, the amount of depreciation is ______.
A depreciable asset may suffer obsolescence due to ______.
Which method shall be efficient, if repairs and maintenance cost of an asset increases as it grows older.
What is the annuity method?
State the advantages of written down value method of depreciation.
State the limitations of written down value method of depreciation.
A manufacturing company purchased on 1st April 2010, a plant and machinery for ₹ 4,50,000 and spent ₹ 50,000 on its installation. After having used it for three years, it was sold for ₹ 3,85,000. Depreciation is to be provided every year at the rate of 15% per annum on the fixed installment method. Accounts are closed on 31st March every year. Calculate profit or loss on sale of machinery.
A boiler was purchased on 1st January 2015 from abroad for ₹ 10,000. Shipping and forwarding charges amounted to 12,000. Import duty ₹ 7,000 and expenses of installation amounted to ₹ 1,000. Calculate depreciation for the first 3 years @10% p.a. on diminishing balance method assuming that the accounts are dosed 31st December each year.
A firm acquired a machine on 1st April 2015 at a cost of ₹ 50,000. Its life is 6 years. The firm writes off depreciation @ 30% p.a. on the diminishing balance method. The firm closes its books on 31st December every year. Show the machinery account and depreciation account for three years starting from 1st April 2015.
Mr. ‘X’ purchased Furniture on 1st October 2015 at ₹ 2,80,000 and spent ₹ 20,000 on its installation. He provides depreciation at 6% under the straight-line method on 31st March 2016. Calculate the amount of depreciation.
Radhika-Masale’ Amravati purchased a Plant on 1st Jan. 2015 for ₹ 80,000. A new Plant was also purchased
for ₹ 60,000, installation expenses being ₹ 10,000 on 1st April 2016. On 1st Jan 2017, a new Plant was purchased for ₹ 20,000, by disposing of the 1st Plant at ₹ 60,000.
Prepare Plant Account and Depreciation Account for 31st March 2015, 31st March 2016, and 31st March 2017, assuming that the rate of depreciation was @ 10% on Diminishing Balance Method.
Solution:
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 charges of 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.
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.
Which depreciation method helps a firm accumulate funds for replacing an asset after its useful life?
The Sum-of-the-Years’-Digits Method results in:
