Question

On 1st April, 2016, a Company bought Plant and Machinery costing ₹ 80,000 and spent Rs
5000 on carriage ,Rs 2000 on its installation and Rs 3000 on import duty . It is estimated that its
working life is 10 years, at the end of which it will fetch ₹ 10,000. Additions are made on 1st
April, 2017 to the value of ₹ 50,000 (Residual value ₹ 10,000). More additions are made on Oct.
1, 2017 to the value of ₹ 10800 (Break up value ₹ 1 800). The working life of both the additional
Plant and machinery is 20 years. Calculate depreciation per annum on all the three Machinery .

Answer 1

Answer:

Explanation:

On 1st April, 2016

Cost of Assets  - scrap value / Estimated useful life of assets

( 80000 + 5000 + 2000 + 3000) - 10000 /10

90000 - 10000 /10

= 80000 /10

= 8000

1st  April, 2017

Cost of Assets  - scrap value / Estimated useful life of assets

50000 - 10000 /20

= 40000 /20

= 2000

1 Oct. , 2017

Cost of Assets  - scrap value / Estimated useful life of assets

10800 - 1800 /20

= 9000 /20

= 450