Question

Hasar purchased a machine on 1st Jan. 1992 at Rs. 14,400. The scrap value after ten
years time is expected to be Rs. 3,400. If depreciation is written off by equal instalments
every Dec. 31, show the Machinery A/c for the first three years. Calculate the rate of
depreciation​

Answer 1

Explanation:

Given, purchase amount- rs.14,400

scrap value- rs. 3,400

difference- rs. 11,000; which is written off in equal installments every year for 10 years.

therefore, depreciation per year= 11,000/10= Rs. 1,100.

Answer 2

Calculation of Depreciation:

Total depreciation is 14400-3400 = 11000

Fixed annual depreciation is 11000/10 = 1100

The machinery account for 3 years is attached below.

The rate of depreciation is 100 * 1100/11000 = 10%

#SPJ3