Question

write about two methods of depreciation with examples :-
1. straight line method
2. double declining balance ??

Answer 1

A Machinery Costing 10,000 depreciation rate 10%. Provide 3 Year Depreciation.

1. Straight Line Method:

Cost = 10,000

(-) 1st year depreciation @ 10% = 1,000

------------

= 9,000

(-) 2nd year depreciation @ 10% = 1,000

-------------

= 8,000

(-) 3rd year depreciation @ 10% = 1,000

-------------

7,000

2. WDV Method:

Cost = 10,000

(-) 1st year depreciation @ 10% = 1,000

-----------

= 9,000

(-) 2nd year depreciation @ 10% = 900

------------

= 8,100

(-) 3rd year depreciation @ 10% = 810

------------

= 7,290