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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)25,000b)10530c)9,477d)13,000Correct answer is option 'D'. Can you explain this answer? Related Test: Test: Depreciation Accounting - 1

## CA Foundation Question

By Kanta Sharma · Apr 20, 2020 ·CA Foundation
B4u Jyo answered Apr 11, 2020
Machine value=120000+10000
=130000
130000 into 10% is equal to 13000
117000 into 10% is equals to 11700
105300 into 10% is equals to 10,530
94770 into 10% equals to 9477

In under value method the depericiation is charged at fix rate in each & every year therefore the total expenditure for purchase machinery and installation expense is - 120000 + 10000 = 130000 and depericiation is provided 10 % so

130000 Ã—10% = 13000 rs depericiation for 4th year.

Shwena Chopra answered Apr 22, 2020
9477 is the correct ans. As the method which is used is written down value method

Yash Reddy answered 4 weeks ago
It is also called as down value method.am right?