the original cost of the machine is 1900000 machine installation charge are 100000 working life of the machine is 5 years and residual value is 40000 if the depreciation is charged on straight line basis then 4th years depreciation will be
Answers
Question:
Purchase Price of Machine Rs. 1,50,000, Installation charges Rs. 50,000, Residual values Rs. 81,920, the rate of depreciation under WDV Method is 20%. The useful life of machine is:
Step-by-step explanation:
Total cost of machinery = Rs 1,50,000 + Rs 50,000 = 2,00,000
Calculation of depreciation
Depreciation for 1st year
2,00,000@20% = 40,000
Depreciation for 2nd Year
160000(2,00,000-40,000)@20% = 32,000
Depreciation for 3rd year
1,28,000(1,60,000-32,000)@20% = 25000
Depreciation for 4th year
1,02,000(1,28,000-25000)@20% = 20,480
Which implies that the residual value of the asset at the end of 4th year is Rs 81920 (1,02,000-20,480)
Hence the estimated useful life of the asset is 4 years
u can substitute ur values here instead of the values given...
Answer:
[(1900000 + 100000 ) - 40000] ÷ 5 = 392000
Step-by-step explanation:
in SLM method depreciation amount for every year is same so the depreciation of the 4th year is 392000
Amount of depreciation =
Amount of depreciation = (cost of asset - residual value)÷ usefullife