A machine which was bought for $180,000 on 30 April 2008. The residual value was $5,000 and depreciation rate was 25%. Depreciation is to be charged under the reducing balance method on month to month basis. Compute the depreciation at 31st December 2008
  • a)
    $30,000
  • b)
    $19,000
  • c)
    $18,000
  • d)
    $15,000
Correct answer is option 'A'. Can you explain this answer?

CA Foundation Question

Soumi Choudhuri
Sep 29, 2020
In reducing bal method salvage value ignored . now 180000*8/12 * 25 = 30000

machine purchased for 8 months

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