Question

PURCHASE PRICE OF MACHINE RS. 80,000 ; INSTALLATION CHARGES RS. 20,000 , RESIDUAL VALUE RS. 40,960, USEFUL LIFE 4 YEARS . ACCOUNTING YEAR IS FINANCIAL YEAR. DATE WHEN MACHINE WAS PUT TO USE - 1st OF OCTOBER . CALCULATE ANNUAL DEPRECIATION AS PER FIXED INSTALMENT METHOD FOR CURRENT YEAR .

a) RS. 12,500
b) RS. 11,070
c) RS. 7,380
d) RS. 25,000

Answer 1

Answer:

Depreciation(SLM basis) = Depreciable value - Residual value

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Useful life.

= 1,00,000 - 40,960

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4

= 14,760 x 6/12 ( October 1st to 31st march)

= RS-7,380

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