Question

1.ON 1' JAN 2020 A FIRM PURCHASE MACHINE FOR RS.2,70,000 AND SPEND 30,000 FOR ITS INSTTALATION. EXPECTED LIFE OF THE MACHINE ID 15 YEARS. AND AFTER THIS SCRAP VALUE IS 50000. CALCULATE DEPRECIATION AND RATE OF DEPRECIATION​

Answer 1

Answer:

AOD = 16000 and ROD = 5.925%

Explanation:

Amount of depreciation = (Cost of Machine - Scrap Value) / Life in Years

= (270000 - 30000) / 15

= 16000

Rate of depreciation = (Amount of depreciation / Cost of Machine) x 100

= (16000/270000) x 100

= 5.925%