6.)A eompany purchased a plant for 4,00,000. The useful life of the plant is 10 years and th
estimated scrap value is 40,000. Determine the rate of depreciation when the managemen
wants to depreciate it by straight line method.
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As per question
Cost of Plant = Rs 50,000
Useful life = 10 years
Residual value = Rs 5000
Depreciation = Cost-Residual value/Estimated useful life
=50,000-5,000/10
=45000/10
=4500
Also,
rate of depreciation = Annual depreciation/cost of plant x 100
= 4500/50,000 x 100
= 9%
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