How to calculate written down value method of depreciation example?
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Suppose a firm purchase a machine on 2010 cost 100000. and depreciation charged is @ 10% p. a.
So the depreciation of 2011 will be calculated as 100000 x 10/100 = 10000
Now subtract 10000 from 100000
= 100000-10000= 90000
Now for next year on same depreciation will be charged on the 90000 for successive year.
90000 x 10/100 = 9000
= 900000-9000 = 81000.
So the depreciation of 2011 will be calculated as 100000 x 10/100 = 10000
Now subtract 10000 from 100000
= 100000-10000= 90000
Now for next year on same depreciation will be charged on the 90000 for successive year.
90000 x 10/100 = 9000
= 900000-9000 = 81000.
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