The Balance of an asset account on 1-4-2005 was Rs 90,000 which was sent to the Branch on 1-10-2004. On 31-3-2006 depreciation was charged on this asset at 20% on straight line method. On 31-3-2006 the written down
of this asset in the Books of the Branch would be -
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Rs. 50,000
Value of asset at the end of 2nd year = value at the end of 3rd year x 100/90
= 36,450 x 100/90
= RS-40,500.
Value of asset at the end of 1st year = value at the end of 2nd year x 100/90
= 40,500 x 100/90
= RS-45,000.
Original value = Value at the end of 1st year x 100/90
= 45,000 x 100/90
= RS-50,000.
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