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A machine was purchased for 30,00,000 hoving an estimated total working of 24,000 hours. The scrapvalue is expected to be 2,00,000 and anticipated pattern of distribution of effective hours is as follows:Year1-3 3000 hours per year4-6 2,600 hours per year7-10 1,800 hours per yearRequired : Determine Annual Depreciation under Machine Hour Rate Method.?
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Annual Depreciation Calculation under Machine Hour Rate Method

Step 1: Calculate Depreciation Rate

The first step is to calculate the depreciation rate based on the total cost of the machine, estimated working hours, and scrap value.

Depreciation rate = (Cost of machine - Scrap value) / Estimated working hours
Depreciation rate = (30,00,000 - 2,00,000) / 24,000
Depreciation rate = 116.67 per hour

Step 2: Calculate Annual Depreciation

The annual depreciation can be calculated by multiplying the depreciation rate with the estimated working hours for each year.

Year 1-3: 3000 hours per year
Annual Depreciation = Depreciation rate * Estimated working hours
Annual Depreciation = 116.67 * 3000
Annual Depreciation = 3,50,010

Year 4-6: 2600 hours per year
Annual Depreciation = Depreciation rate * Estimated working hours
Annual Depreciation = 116.67 * 2600
Annual Depreciation = 3,03,342

Year 7-10: 1800 hours per year
Annual Depreciation = Depreciation rate * Estimated working hours
Annual Depreciation = 116.67 * 1800
Annual Depreciation = 2,10,006

Therefore, the annual depreciation under machine hour rate method for each year is as follows:

Year 1-3: 3,50,010
Year 4-6: 3,03,342
Year 7-10: 2,10,006

The total annual depreciation for the machine over 10 years is 23,20,580.
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A machine was purchased for 30,00,000 hoving an estimated total working of 24,000 hours. The scrapvalue is expected to be 2,00,000 and anticipated pattern of distribution of effective hours is as follows:Year1-3 3000 hours per year4-6 2,600 hours per year7-10 1,800 hours per yearRequired : Determine Annual Depreciation under Machine Hour Rate Method.?
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A machine was purchased for 30,00,000 hoving an estimated total working of 24,000 hours. The scrapvalue is expected to be 2,00,000 and anticipated pattern of distribution of effective hours is as follows:Year1-3 3000 hours per year4-6 2,600 hours per year7-10 1,800 hours per yearRequired : Determine Annual Depreciation under Machine Hour Rate Method.? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A machine was purchased for 30,00,000 hoving an estimated total working of 24,000 hours. The scrapvalue is expected to be 2,00,000 and anticipated pattern of distribution of effective hours is as follows:Year1-3 3000 hours per year4-6 2,600 hours per year7-10 1,800 hours per yearRequired : Determine Annual Depreciation under Machine Hour Rate Method.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A machine was purchased for 30,00,000 hoving an estimated total working of 24,000 hours. The scrapvalue is expected to be 2,00,000 and anticipated pattern of distribution of effective hours is as follows:Year1-3 3000 hours per year4-6 2,600 hours per year7-10 1,800 hours per yearRequired : Determine Annual Depreciation under Machine Hour Rate Method.?.
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