Question

the original cost of fixed asset is rupees 40000. if the depreciation undar reducing balance method is 10% per annum. its W.D.V. after 2 years will be ???​

Answer 1

Depreciation during first year =40,000×10/100= 4000.....

So during the first year balance which is carried down will be 40,000-4,000=36,000...

Balance which is brought down next year is 36,0000.....

So since it is WDV mathod depreciation is calculated on the book value ....hence depreciation=36,000×10/100=3,600.....

So written down value after 2 years will be 36,000-3600=32,400......