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A machinary was purchased by X ltd on 1-01-2013. Depreciation was charged @15% pa under SLM with effect from 2nd year depreciation was charged under WDV method at the same rate. The WDV of depreciation under 1-01-2015 was rs 3,68,475. Find the original cost of machinary? a)433,500 b)510,000 c)600,000 d)423,500?
correct answer is c. why?
correct answer is c. why?
Most Upvoted Answer
A machinary was purchased by X ltd on 1-01-2013. Depreciation was char...
Original Cost of Machinery:
To find the original cost of the machinery, we need to calculate the accumulated depreciation up to the end of 2014 and subtract it from the WDV (written down value) of depreciation as of 1-01-2015.
Calculation:
Given:
WDV of depreciation as of 1-01-2015 = Rs 3,68,475
Depreciation is charged at a rate of 15% per annum. Let's calculate the accumulated depreciation up to the end of 2014 using both the Straight Line Method (SLM) and the Written Down Value (WDV) method.
Depreciation Calculation:
Straight Line Method (SLM):
Since depreciation is charged at a rate of 15% per annum, the annual depreciation expense would be:
15% * Original Cost of Machinery
For the first year, no depreciation is charged.
For the second year, depreciation charged = 15% * Original Cost of Machinery
For the third year, depreciation charged = 15% * Original Cost of Machinery
And so on...
Accumulated Depreciation Calculation:
Using the SLM method, the accumulated depreciation at the end of 2014 would be:
15% * Original Cost of Machinery + 15% * Original Cost of Machinery + 15% * Original Cost of Machinery + ...
= 15% * (Original Cost of Machinery + Original Cost of Machinery + Original Cost of Machinery + ...)
= 15% * (Original Cost of Machinery * (1 + 1 + 1 + ...))
Since the machinery was purchased on 1-01-2013, there are two years from 2013 to 2014. Therefore, the accumulated depreciation at the end of 2014 would be:
Accumulated Depreciation = 2 * 15% * Original Cost of Machinery
WDV Method:
From the second year onwards, depreciation is charged under the WDV method at the same rate of 15% per annum. In the WDV method, the depreciation charged each year is based on the written down value of the asset.
Therefore, the depreciation charged in each subsequent year would be:
15% * WDV of the previous year
Calculating Original Cost of Machinery:
To find the original cost of the machinery, we need to equate the accumulated depreciation calculated using the SLM method and the accumulated depreciation obtained from the WDV method.
Equate:
2 * 15% * Original Cost of Machinery = Rs 3,68,475
Solving this equation, we find:
Original Cost of Machinery = Rs 600,000
Therefore, the correct answer is option c) Rs 600,000.
To find the original cost of the machinery, we need to calculate the accumulated depreciation up to the end of 2014 and subtract it from the WDV (written down value) of depreciation as of 1-01-2015.
Calculation:
Given:
WDV of depreciation as of 1-01-2015 = Rs 3,68,475
Depreciation is charged at a rate of 15% per annum. Let's calculate the accumulated depreciation up to the end of 2014 using both the Straight Line Method (SLM) and the Written Down Value (WDV) method.
Depreciation Calculation:
Straight Line Method (SLM):
Since depreciation is charged at a rate of 15% per annum, the annual depreciation expense would be:
15% * Original Cost of Machinery
For the first year, no depreciation is charged.
For the second year, depreciation charged = 15% * Original Cost of Machinery
For the third year, depreciation charged = 15% * Original Cost of Machinery
And so on...
Accumulated Depreciation Calculation:
Using the SLM method, the accumulated depreciation at the end of 2014 would be:
15% * Original Cost of Machinery + 15% * Original Cost of Machinery + 15% * Original Cost of Machinery + ...
= 15% * (Original Cost of Machinery + Original Cost of Machinery + Original Cost of Machinery + ...)
= 15% * (Original Cost of Machinery * (1 + 1 + 1 + ...))
Since the machinery was purchased on 1-01-2013, there are two years from 2013 to 2014. Therefore, the accumulated depreciation at the end of 2014 would be:
Accumulated Depreciation = 2 * 15% * Original Cost of Machinery
WDV Method:
From the second year onwards, depreciation is charged under the WDV method at the same rate of 15% per annum. In the WDV method, the depreciation charged each year is based on the written down value of the asset.
Therefore, the depreciation charged in each subsequent year would be:
15% * WDV of the previous year
Calculating Original Cost of Machinery:
To find the original cost of the machinery, we need to equate the accumulated depreciation calculated using the SLM method and the accumulated depreciation obtained from the WDV method.
Equate:
2 * 15% * Original Cost of Machinery = Rs 3,68,475
Solving this equation, we find:
Original Cost of Machinery = Rs 600,000
Therefore, the correct answer is option c) Rs 600,000.
Community Answer
A machinary was purchased by X ltd on 1-01-2013. Depreciation was char...
As depreciation charged on 2nd year is 368475
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A machinary was purchased by X ltd on 1-01-2013. Depreciation was charged @15% pa under SLM with effect from 2nd year depreciation was charged under WDV method at the same rate. The WDV of depreciation under 1-01-2015 was rs 3,68,475. Find the original cost of machinary? a)433,500 b)510,000 c)600,000 d)423,500?correct answer is c. why?
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A machinary was purchased by X ltd on 1-01-2013. Depreciation was charged @15% pa under SLM with effect from 2nd year depreciation was charged under WDV method at the same rate. The WDV of depreciation under 1-01-2015 was rs 3,68,475. Find the original cost of machinary? a)433,500 b)510,000 c)600,000 d)423,500?correct answer is c. why? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A machinary was purchased by X ltd on 1-01-2013. Depreciation was charged @15% pa under SLM with effect from 2nd year depreciation was charged under WDV method at the same rate. The WDV of depreciation under 1-01-2015 was rs 3,68,475. Find the original cost of machinary? a)433,500 b)510,000 c)600,000 d)423,500?correct answer is c. why? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A machinary was purchased by X ltd on 1-01-2013. Depreciation was charged @15% pa under SLM with effect from 2nd year depreciation was charged under WDV method at the same rate. The WDV of depreciation under 1-01-2015 was rs 3,68,475. Find the original cost of machinary? a)433,500 b)510,000 c)600,000 d)423,500?correct answer is c. why?.
A machinary was purchased by X ltd on 1-01-2013. Depreciation was charged @15% pa under SLM with effect from 2nd year depreciation was charged under WDV method at the same rate. The WDV of depreciation under 1-01-2015 was rs 3,68,475. Find the original cost of machinary? a)433,500 b)510,000 c)600,000 d)423,500?correct answer is c. why? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A machinary was purchased by X ltd on 1-01-2013. Depreciation was charged @15% pa under SLM with effect from 2nd year depreciation was charged under WDV method at the same rate. The WDV of depreciation under 1-01-2015 was rs 3,68,475. Find the original cost of machinary? a)433,500 b)510,000 c)600,000 d)423,500?correct answer is c. why? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A machinary was purchased by X ltd on 1-01-2013. Depreciation was charged @15% pa under SLM with effect from 2nd year depreciation was charged under WDV method at the same rate. The WDV of depreciation under 1-01-2015 was rs 3,68,475. Find the original cost of machinary? a)433,500 b)510,000 c)600,000 d)423,500?correct answer is c. why?.
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A machinary was purchased by X ltd on 1-01-2013. Depreciation was charged @15% pa under SLM with effect from 2nd year depreciation was charged under WDV method at the same rate. The WDV of depreciation under 1-01-2015 was rs 3,68,475. Find the original cost of machinary? a)433,500 b)510,000 c)600,000 d)423,500?correct answer is c. why?, a detailed solution for A machinary was purchased by X ltd on 1-01-2013. Depreciation was charged @15% pa under SLM with effect from 2nd year depreciation was charged under WDV method at the same rate. The WDV of depreciation under 1-01-2015 was rs 3,68,475. Find the original cost of machinary? a)433,500 b)510,000 c)600,000 d)423,500?correct answer is c. why? has been provided alongside types of A machinary was purchased by X ltd on 1-01-2013. Depreciation was charged @15% pa under SLM with effect from 2nd year depreciation was charged under WDV method at the same rate. The WDV of depreciation under 1-01-2015 was rs 3,68,475. Find the original cost of machinary? a)433,500 b)510,000 c)600,000 d)423,500?correct answer is c. why? theory, EduRev gives you an
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