Question

Book Value of an asset after 2 years is Rs.80,000; Rate of depreciation is 10% p.a. under Straight Line method. The Original Cost Of an asset would be​

Answer 1

Answer:

the original cost - 1,00,000

Answer 2

The original cost of the asset will be Rs. 1,00,000.

Given:

the book value of an asset after 2 years = Rs. 80,000

rate of depreciation = 10% per annum

To Find:

the original cost of the asset

Solution:

the original cost of the asset will be given as-

original asset = book value + (original cost × rate of depreciation × time period)/100

let the original price be x

⇒ x = 80,000 + (x × 10 × 2)/100

x = 80,000 + x/5

4x/5 = 80,000

x = 80,000 × 5/4

x = 1,00,000

Thus, the original cost of the asset will be Rs. 1,00,000.

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