Guys its urgent plzz answer it
The original cost of a machinery is Rs 10,00,000 ; its scrap value is Rs 40,000 and its expected useful life is 10 years. What will be the amount of depreciation for the fourth year according to the original cost method ? Also specify the rate of depreciation.
Answers
Answer :
Cost of machinery (asset) = Rs 10,00,000
Scrap Value = Rs 40,000
Estimated useful life = 10 years
∴ Depreciation = Cost of Asset - Scrap Value/ Estimated useful life
= 10,00,000 - 40,000/10
= 960000/10
= Rs 96,000
So Depreciation year will be Rs 96,000
Now
Rate of Depreciation = 96,000/10,00,000*100
= 0.096*100
= 9.6 %
Answer:
Annual Depreciation per annum
= Cost of Asset-Estimated Scrap Value/Expected or Estimated life of Asset
= 100000/10 = ₹ 10,000