Question

Q11. An asset was purchased for Rs. 25,00,000 and as per Reducing Balance Method, 20% depreciation is charged. What is the value of Asset at the end of three years. a) Rs. 1,28,0000 b) Rs. 1,54,0000 c) Rs. 1,23,0000 d) Rs. 1,00,0000​

Answer 1

Answer:

Correct option is

C

Rs.6,400

Calculation of the value of asset at the end of three years under written down value method:

Cost of the asset                                                         Rs. 12500

Less : Depreciation @ 20%                                         Rs . (2500)

Written down value at the end of first year               Rs. 10000

Less : Depreciation @ 20%                                         Rs  (2000)

Written down value at the end of second year         Rs. 8000

Less : Depreciation @ 20%                                          Rs. (1600)

Written down value at the end of third year              Rs. 6400

Explanation:

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