Question

Find out the amount of depreciation for the following case under wdv method for the first 5 years. Cost 1,20,000; salvage value rs.10,000 rate of depreciation 25% . round the amount to nearest rupee.

Answer 1

Depreciation shows how much an asset has been used over time and decreases the value of the asset.

To find the amount of depreciation, use the formula (Cost - Salvage Value) × Rate of Depreciation.

(Rs 120000 - Rs 10000) × 25%

= Rs 110000 × 25%

= Rs 27500

Therefore, the amount of depreciation rounded off to:

1) The nearest (thousandth) rupee is: Rs 28000

2) The nearest (ten-thousandth) rupee is: Rs 30000