Question

A Machine is purchased on 1st April, 2018 for ₹80,000. Expenses incurred on its installation is ₹20,000. The residual value at the end of its expected useful life of 4 years is estimated at ₹10,000. The amount of depreciation under straight line method, for the year ended on 31st March, 2019 will be​

Answer 1

Answer:

Determination of the amount of depreciation :-

Depreciation = cost - estimated realizable or scrap value ÷ no. Of years of expected useful life.

Depreciation = (80,000 + 20,000) - 10,000 ÷ 4 years

Depreciation = 1,00,000 - 10,000 ÷ 4 years.

Depreciation = 90,000 ÷ 4 years

Depreciation = 22,500 (answer).

Thanks.

Answer 2

ANSWER :-

The amount of depreciation under straight line method, for the year ended on 31st March, 2019 will be​ [22,500]

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