Question

A machine was purchased on 1/4/2010 for₹2 lakh.Its estimated scrap value was₹10000. The depreciation was provided at 10% p.a on the diminishing balance method.show the machinary account for the year ending 31/3/2011,2012,2013​

Answer 1

Explanation:

Depreciation on SLM Basis = 10,000 x 10/100

= RS-1,000.

Depreciation On WDV basis :-

1st year (2005-06)

= 10,000 x 10/100

= RS-1,000.

2nd year (2006-07)

= (10,000 - 1,000) 9,000 x 10/100

= RS-9,00.

Difference in depreciation = Depreciation in SLM - Depreciation in WDV

= 1,000 - 9,00

= RS-100.