If Machinery Cost Rs. 25,000 , Dep. Rate @ 8 % under diminshing balance method Calculate Depreciation for 2nd year
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3
Answer:
One has to find the correct rate of depreciation.
Subtract the total scrap value from the total asset cost.
Multiply the whole book value by maintaining the depreciation rate.
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Answer:
Explanation:
Cost of machinery at the beginning of first year = ₹ 25,000
Depreciation for the first year = 25,000 × 8% = 2,000
Book value at the end of first year = 25,000 - 2,000 = ₹ 23,000
Cost of machinery at the beginning of second year = ₹ 23,000
Depreciation for the second year = 23,000 × 8% = 1,840
Book value at the end of second year = 23,000 - 1,840 = 21,160
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