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The cost of a new pump (including installation) is 24,000 Rupees. The pump has useful life of 10 years. Its salvage value is 4000 Rupees. Assuming straight line depreciation, the book value of the pump at the end of 4th year, rounded to the nearest integer, is ___ Rupees.
Correct answer is '16000'. Can you explain this answer?
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The cost of a new pump (including installation) is 24,000 Rupees. The ...
Cost of new pump = Rs. 24000
Useful life of pump = 10 years
Salvage value of pump at the end of service life = 4000
Annual Depreciation using straight line method = (24000-4000)/10 = 2000 Rs
Book Value at the end of 4th year = Cost of equipment – Accumulated Depreciation till the end of 4th year
= 24000- (4*Annual depreciation)
= 24000-(4*2000)
=24000-8000
= 16000 Rs
Useful life of pump = 10 years
Salvage value of pump at the end of service life = 4000
Annual Depreciation using straight line method = (24000-4000)/10 = 2000 Rs
Book Value at the end of 4th year = Cost of equipment – Accumulated Depreciation till the end of 4th year
= 24000- (4*Annual depreciation)
= 24000-(4*2000)
=24000-8000
= 16000 Rs
Most Upvoted Answer
The cost of a new pump (including installation) is 24,000 Rupees. The ...
Explanation:
Given data:
The straight line depreciation method assumes that an asset loses an equal amount of value each year over its useful life. The formula to calculate depreciation using straight line method is:
Depreciation expense = (Cost of asset - Salvage value) / Useful life
Using the above formula, we can calculate the annual depreciation expense of the pump:
Depreciation expense = (24,000 - 4,000) / 10 = 2,000 Rupees per year
To find the book value of the pump at the end of 4th year, we need to subtract the accumulated depreciation from the cost of the pump:
Accumulated depreciation = Depreciation expense x Number of years
Accumulated depreciation = 2,000 x 4 = 8,000 Rupees
Book value = Cost of pump - Accumulated depreciation
Book value = 24,000 - 8,000 = 16,000 Rupees
Therefore, the book value of the pump at the end of the 4th year, rounded to the nearest integer, is 16,000 Rupees.
Given data:
- Cost of new pump (including installation) = 24,000 Rupees
- Useful life of pump = 10 years
- Salvage value = 4,000 Rupees
- Depreciation method = Straight line depreciation
The straight line depreciation method assumes that an asset loses an equal amount of value each year over its useful life. The formula to calculate depreciation using straight line method is:
Depreciation expense = (Cost of asset - Salvage value) / Useful life
Using the above formula, we can calculate the annual depreciation expense of the pump:
Depreciation expense = (24,000 - 4,000) / 10 = 2,000 Rupees per year
To find the book value of the pump at the end of 4th year, we need to subtract the accumulated depreciation from the cost of the pump:
Accumulated depreciation = Depreciation expense x Number of years
Accumulated depreciation = 2,000 x 4 = 8,000 Rupees
Book value = Cost of pump - Accumulated depreciation
Book value = 24,000 - 8,000 = 16,000 Rupees
Therefore, the book value of the pump at the end of the 4th year, rounded to the nearest integer, is 16,000 Rupees.
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The cost of a new pump (including installation) is 24,000 Rupees. The pump has useful life of 10 years. Its salvage value is 4000 Rupees. Assuming straight line depreciation, the book value of the pump at the end of 4th year, rounded to the nearest integer, is ___ Rupees.Correct answer is '16000'. Can you explain this answer?
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The cost of a new pump (including installation) is 24,000 Rupees. The pump has useful life of 10 years. Its salvage value is 4000 Rupees. Assuming straight line depreciation, the book value of the pump at the end of 4th year, rounded to the nearest integer, is ___ Rupees.Correct answer is '16000'. Can you explain this answer? for GATE 2024 is part of GATE preparation. The Question and answers have been prepared according to the GATE exam syllabus. Information about The cost of a new pump (including installation) is 24,000 Rupees. The pump has useful life of 10 years. Its salvage value is 4000 Rupees. Assuming straight line depreciation, the book value of the pump at the end of 4th year, rounded to the nearest integer, is ___ Rupees.Correct answer is '16000'. Can you explain this answer? covers all topics & solutions for GATE 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The cost of a new pump (including installation) is 24,000 Rupees. The pump has useful life of 10 years. Its salvage value is 4000 Rupees. Assuming straight line depreciation, the book value of the pump at the end of 4th year, rounded to the nearest integer, is ___ Rupees.Correct answer is '16000'. Can you explain this answer?.
The cost of a new pump (including installation) is 24,000 Rupees. The pump has useful life of 10 years. Its salvage value is 4000 Rupees. Assuming straight line depreciation, the book value of the pump at the end of 4th year, rounded to the nearest integer, is ___ Rupees.Correct answer is '16000'. Can you explain this answer? for GATE 2024 is part of GATE preparation. The Question and answers have been prepared according to the GATE exam syllabus. Information about The cost of a new pump (including installation) is 24,000 Rupees. The pump has useful life of 10 years. Its salvage value is 4000 Rupees. Assuming straight line depreciation, the book value of the pump at the end of 4th year, rounded to the nearest integer, is ___ Rupees.Correct answer is '16000'. Can you explain this answer? covers all topics & solutions for GATE 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The cost of a new pump (including installation) is 24,000 Rupees. The pump has useful life of 10 years. Its salvage value is 4000 Rupees. Assuming straight line depreciation, the book value of the pump at the end of 4th year, rounded to the nearest integer, is ___ Rupees.Correct answer is '16000'. Can you explain this answer?.
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