Question

Machinery was purchased on July 1, 2020. Depreciation was to be charged @10\% p.a on March 31 every year by WDV. For the year ending March 31,2021 depreciation charged was Rs.1,20,000. Cost of Machinery purchased was
(a) Rs.12,00,000
(b) Rs.16,00,000
(c) Rs.1,08,000
(d) Rs.10,80,000

Answer 1

Answer:

Option (a) 12,00,000

10% on 12,00,000 Will be 1,20,000

Hope it helps

Answer 2

Given:

Date of purchase: July 1, 2020

Depreciation charged = 10% p.a. as WDV

Year end = March 31st 2021

Depreciation amount = 120000

To find:

Original cost.  

Solution:

Let the original cost value be 'x'

Time = 9 months

Depreciation rate = 10% p.a.

Depreciation amount = Rs. 120000

$Depreciation = \frac{10}{100} *x* \frac{9}{12}$

$120000 = \frac{9x}{120}$

$\frac{120000*120}{9} = x$

$1600000 = x$

Therefore the original cost of the machinery purchased = Rs. 1600000

the correct option is (b) Rs. 1600000