Question

On 1st April, 2017 a plant was purchased by Mohit Ltd. for Rs. 200000. The
rate of depreciation was charged at 40%. Under diminishing balance method,
calculate the depreciation amount for 31st March, 2018.
Rs. 48000
O Rs. 120000
O Rs. 40000
O Rs. 80000​

Answer 1

Answer:

2,00,000*40/100*11/12

Answer 2

Given:

Book value of the plant = Rs. 200000

The rate of depreciation charged = 40%

To Find:

We have to find the depreciation amount.

Solution:

According to the Diminishing balance method/ Reducing balance method, the depreciation rate is charged at a fixed percentage on the book value of the asset.

The equation is given by:

Amount of depreciation = $\frac{Book\,Value\times Rate\,of\,depreciation }{100}$

By substituting the values, we get

Amount of depreciation = $\frac{200000\times40}{100}$

                                        = 80000

∴ We get the amount of depreciation as Rs. 80000.