A manufacturing concern whose books are closed on 31 december, purchase machinery was acquired for ₹1000 on 1-7-2001 and for ₹16061 on 1-1-2004 certain machinery purchase for ₹10000 on 1-1-2009 was sold for 5000 on 30-06-2003 prepare machinery account for 5 year at 10% pa written down value method
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Answer:
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.
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