Question

M purchased a machine for Rs. 20,000. The transportation costs were Rs. 1,500 and installation costs were Rs. 750. The machine broke down at the end of the first month in use and cost Rs. 400 to repair. M depreciates machinery at 15% each year on cost, assuming no residual value.
What is the net book value of the machine after one year?

Rs. 19,523
Rs. 14,850
Rs. 18,913
Rs. 17,887

Answer 1

Answer:

I don't know about the answer.

Answer 2

Answer:

Option "C" is the correct answer to the following statement.

Explanation:

Given:

Purchase price of machine = 20,000

Transportation costs = 1,500

Installation costs = 750

Net value of machine after 1 year = ?

Computation of net value of machine after 1 year:

Total Machine cost = Purchase price of machine + Transportation costs + Installation costs

= 20,000 + 1,500 + 750

Total Machine cost = 22,250

Net value of machine after 1 year = Total Machine cost - (15% of Total Machine cost )

= 22,250 - (22,250 × 15%)

= 22,250 - 3,337..5

Net value of machine after 1 year = 18,912.5

Net value of machine after 1 year = 18,913 (approx)

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