1.
If the cost of the asset is Rs. 20,000 scrap value is Rs. 5000; life is 5 years, the amount of
depreciation per year will be?
Answers
Step-by-step explanation:
Q.1) Under what situations does a business invest the fund outside
None of these
The funds can not be readily invested in the business
When ready cash is necessary on a certain date
Both
Correct Answer: Both
Q.2) Following are the disadvantages of secret reserves except
Absorbing the unforeseen losses
Loss to shareholders
Unfair presentation of financial statements
Mis-use by management
Correct Answer: Absorbing the unforeseen losses
Q.3) Match the following. Options are
a(iii), b(ii), c(i)
a(ii), b(iii), c(ii)
a(ii), b(i), c(iii)
a(iii), b(i), c(ii)
Correct Answer: a(iii), b(i), c(ii)
Q.4) A company purchased a vehicle for Rs.6000. That will be used for 5 years and its residual value is expected to be Rs.1000. What will be the annual amount of deprecation using straight line method?
Rs.1000
Rs.3000
Rs.2000
Rs.5300
Correct Answer: Rs.1000
Q.5) A fixed asset was bought for Rs.5000. Its accumulated depreciation is Rs.3000 and rate of depreciation is 20%. Calculate its depreciation expenses for the current accounting period using reducing balance method?
Rs.2000
Rs.300
Rs.400
Rs.4000
Correct Answer: Rs.400
Q.6) A car was purchased for Rs.5500. Its residual value was estimated to be Rs.500 while its monthly depreciation expenses are Rs.100 using straight line method. Which of the following is the annual rate of depreciation?
0.22
0.2
0.24
0.23
Correct Answer: 0.24
Q.7) A fixed asset having book value of Rs.2000 was sold for Rs.1500. Find out gain or loss.
Rs.500 gain
Rs.2500 loss
Rs.500 loss
Rs.1500 gain
Correct Answer: Rs.500 loss
Q.8) A business bought a plant at a cost of Rs.20000, with an estimated life of 5 years and an estimated residual value of Rs. 2000, the annual depreciation on this asset will be
Rs.3200
Rs.3600
Rs.3700
Rs.3500
Correct Answer: Rs.3600
Q.9) An asset was bought for Rs.40000 on 1-1-1988. It was decided to charge the depreciation on this asset @ 10% under reducing balance method. The depreciation on this asset will be:
Rs.2350
Rs.3240
Rs.2540
Rs.3000
Correct Answer: Rs.3240
Q.10) Shyam Ltd. purchased machinery on 1stMay, 2009 for Rs.60000. On 1stJuly, 2010 it purchased another machine for Rs. 20000. On 31st March, 2011, it sold the first machine purchased in 2009 for Rs. 38500. Depreciation provided @ 20% p.a. on the original cost every year. Accounts are closed 31st December every year. Calculate profit on machine
Rs.25000
Rs.1500
Rs.2000
Rs.1000
Correct Answer: Rs.1500
Q.11) The original cost of the asset is Rs.250000.The useful life of the asset is 10 years and net residual value is estimated to be Rs.50000. Now, the amount of depreciation to be charged every year will be
Rs.55000
Rs.25000
Rs.50000
Rs.20000
Correct Answer: Rs.20000
Q.12) M/s Singh purchased a plant for Rs. 500000 on April, 01 2002, and spent Rs.50000 for its installation. The salvage value of the plant after its useful life of 10 years is estimated to be Rs.10000.Calculate amount of depreciation as depreciation is charged using straight line method
Rs.51000
Rs.54000
Rs.52000
Rs.50000
Correct Answer: Rs.54000
Q.13) M/s Mohit and Sons acquired a machine for Rs.180000 on October 01, 2012, and spent Rs.20000 for its installation. The firm writes-off depreciation at the rate of 10% on original cost every year. Record necessary journal entries for the year 2012 for the expenses incurred on installation
Correct Answer:
Q.14) A machine purchased for Rs.1,00,000 on November 01, 2004, having accumulated depreciation amounting to Rs.60,000 was sold on April 1, 2009 for Rs.35,000. The Asset Disposal account will be prepared. Calculate the amount of loss on sale
Rs.10000
Rs.15000
Rs.20000
Rs.5000
Correct Answer: Rs.5000
Q.15) Original cost of a machinery is Rs.500000, salvage value is Rs.20000. Expected useful life is 10 years. What will be the amount of depreciation for the fourth year according to original cost method
Rs.45000
Rs.47000
Rs.48000
Rs.42000
Correct Answer: Rs.48000
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