Question

a machine costing Rs.2,00,000 has scrap value of Rs. 20000 after 5 years.the rate of depreciation charge under straight line method will be (1) 22.20% (2) 20% (3)18% (4) non of these​

Answer 1

(3). 18%

The Rate of Depreciation is 18 %

Explanation:

Given :

•The Cost of machine = Rs.2,00,000

• Scrap Value = Rs. 20000

• Useful life of asset (in years) = 5 Years

• Annual Depreciation under SLM (Straight Line Method)

To find :

• The Rate of Depreciation

Solution :

Calculation of depreciation under

SLM =

• Annual Depreciation :

$\sf{\dfrac{(The \: Cost\: Of \: machine \: - \: Scrap \: Value)}{Useful \: life \: of \: asset}}$

$\sf{\longrightarrow \dfrac{(2,00,000 \: - \: 20,000)}{5}}$

$\sf{\longrightarrow{\dfrac{1,80,000}{5}}}$

$\sf{\longrightarrow{\dfrac{1,80,000}{5} \: = \: 36,000}}$

Annual Depreciation = Rs. 36,000

★ Rate of Depreciation =

$\sf{\dfrac{Amount \: of \: Depreciation}{Cost \: of \: machine}\times 100}$

$\longrightarrow{\sf{\dfrac{36,000}{2,00,000} \times 100}}$

$\longrightarrow$ 0.18 × 100

$\longrightarrow$ 18 %

Rate of Depreciation = 18 %

∴(3). 18%

The Rate of Depreciation is 18 %