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Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installation expenses were Rs 10,000. Residual value after 5 years Rs 5,000. On 01.07.2003, expenses for repairs were incurred to the extent of Rs 2,000. Depreciation is provided @ 10% p.a. under written down value method. Depreciation for the 4th year = ________.
- a)13,000
- b)10530
- c)9,477
- d)25,000
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installat...
Depreciation Calculation:
To calculate the depreciation for the 4th year, we need to follow the written down value method. This method calculates the depreciation based on the value of the asset at the beginning of each year.
Step 1: Calculate the initial cost of the machine
The initial cost of the machine is the purchase cost plus the installation expenses.
Initial cost = Purchase cost + Installation expenses
Initial cost = Rs 1,20,000 + Rs 10,000
Initial cost = Rs 1,30,000
Step 2: Calculate the value of the machine at the beginning of the 4th year
To calculate the value of the machine at the beginning of the 4th year, we need to deduct the depreciation for the first three years from the initial cost.
Depreciation for the first year = Initial cost * Depreciation rate
Depreciation for the first year = Rs 1,30,000 * 10%
Depreciation for the first year = Rs 13,000
Value at the beginning of the 1st year = Initial cost - Depreciation for the 1st year
Value at the beginning of the 1st year = Rs 1,30,000 - Rs 13,000
Value at the beginning of the 1st year = Rs 1,17,000
Depreciation for the second year = Value at the beginning of the 1st year * Depreciation rate
Depreciation for the second year = Rs 1,17,000 * 10%
Depreciation for the second year = Rs 11,700
Value at the beginning of the 2nd year = Value at the beginning of the 1st year - Depreciation for the 2nd year
Value at the beginning of the 2nd year = Rs 1,17,000 - Rs 11,700
Value at the beginning of the 2nd year = Rs 1,05,300
Depreciation for the third year = Value at the beginning of the 2nd year * Depreciation rate
Depreciation for the third year = Rs 1,05,300 * 10%
Depreciation for the third year = Rs 10,530
Value at the beginning of the 3rd year = Value at the beginning of the 2nd year - Depreciation for the 3rd year
Value at the beginning of the 3rd year = Rs 1,05,300 - Rs 10,530
Value at the beginning of the 3rd year = Rs 94,770
Step 3: Calculate the depreciation for the 4th year
Depreciation for the 4th year = Value at the beginning of the 3rd year * Depreciation rate
Depreciation for the 4th year = Rs 94,770 * 10%
Depreciation for the 4th year = Rs 9,477
Therefore, the depreciation for the 4th year is Rs 9,477.
To calculate the depreciation for the 4th year, we need to follow the written down value method. This method calculates the depreciation based on the value of the asset at the beginning of each year.
Step 1: Calculate the initial cost of the machine
The initial cost of the machine is the purchase cost plus the installation expenses.
Initial cost = Purchase cost + Installation expenses
Initial cost = Rs 1,20,000 + Rs 10,000
Initial cost = Rs 1,30,000
Step 2: Calculate the value of the machine at the beginning of the 4th year
To calculate the value of the machine at the beginning of the 4th year, we need to deduct the depreciation for the first three years from the initial cost.
Depreciation for the first year = Initial cost * Depreciation rate
Depreciation for the first year = Rs 1,30,000 * 10%
Depreciation for the first year = Rs 13,000
Value at the beginning of the 1st year = Initial cost - Depreciation for the 1st year
Value at the beginning of the 1st year = Rs 1,30,000 - Rs 13,000
Value at the beginning of the 1st year = Rs 1,17,000
Depreciation for the second year = Value at the beginning of the 1st year * Depreciation rate
Depreciation for the second year = Rs 1,17,000 * 10%
Depreciation for the second year = Rs 11,700
Value at the beginning of the 2nd year = Value at the beginning of the 1st year - Depreciation for the 2nd year
Value at the beginning of the 2nd year = Rs 1,17,000 - Rs 11,700
Value at the beginning of the 2nd year = Rs 1,05,300
Depreciation for the third year = Value at the beginning of the 2nd year * Depreciation rate
Depreciation for the third year = Rs 1,05,300 * 10%
Depreciation for the third year = Rs 10,530
Value at the beginning of the 3rd year = Value at the beginning of the 2nd year - Depreciation for the 3rd year
Value at the beginning of the 3rd year = Rs 1,05,300 - Rs 10,530
Value at the beginning of the 3rd year = Rs 94,770
Step 3: Calculate the depreciation for the 4th year
Depreciation for the 4th year = Value at the beginning of the 3rd year * Depreciation rate
Depreciation for the 4th year = Rs 94,770 * 10%
Depreciation for the 4th year = Rs 9,477
Therefore, the depreciation for the 4th year is Rs 9,477.
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Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installation expenses were Rs 10,000. Residual value after 5 years Rs 5,000. On 01.07.2003, expenses for repairs were incurred to the extent of Rs 2,000. Depreciation is provided @ 10% p.a. under written down value method. Depreciation for the 4th year = ________.a)13,000b)10530c)9,477d)25,000Correct answer is option 'D'. Can you explain this answer?
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Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installation expenses were Rs 10,000. Residual value after 5 years Rs 5,000. On 01.07.2003, expenses for repairs were incurred to the extent of Rs 2,000. Depreciation is provided @ 10% p.a. under written down value method. Depreciation for the 4th year = ________.a)13,000b)10530c)9,477d)25,000Correct answer is option 'D'. Can you explain this answer? 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 Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installation expenses were Rs 10,000. Residual value after 5 years Rs 5,000. On 01.07.2003, expenses for repairs were incurred to the extent of Rs 2,000. Depreciation is provided @ 10% p.a. under written down value method. Depreciation for the 4th year = ________.a)13,000b)10530c)9,477d)25,000Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installation expenses were Rs 10,000. Residual value after 5 years Rs 5,000. On 01.07.2003, expenses for repairs were incurred to the extent of Rs 2,000. Depreciation is provided @ 10% p.a. under written down value method. Depreciation for the 4th year = ________.a)13,000b)10530c)9,477d)25,000Correct answer is option 'D'. Can you explain this answer?.
Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installation expenses were Rs 10,000. Residual value after 5 years Rs 5,000. On 01.07.2003, expenses for repairs were incurred to the extent of Rs 2,000. Depreciation is provided @ 10% p.a. under written down value method. Depreciation for the 4th year = ________.a)13,000b)10530c)9,477d)25,000Correct answer is option 'D'. Can you explain this answer? 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 Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installation expenses were Rs 10,000. Residual value after 5 years Rs 5,000. On 01.07.2003, expenses for repairs were incurred to the extent of Rs 2,000. Depreciation is provided @ 10% p.a. under written down value method. Depreciation for the 4th year = ________.a)13,000b)10530c)9,477d)25,000Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installation expenses were Rs 10,000. Residual value after 5 years Rs 5,000. On 01.07.2003, expenses for repairs were incurred to the extent of Rs 2,000. Depreciation is provided @ 10% p.a. under written down value method. Depreciation for the 4th year = ________.a)13,000b)10530c)9,477d)25,000Correct answer is option 'D'. Can you explain this answer?.
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