Question

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

Answer 1

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 2

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