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H Ltd. purchased a machinery on April 01, 2000 for Rs. 3,00,000. It is estimated that the machinery will have a useful life of 5 years after which it will have no salvage value. If the company follows sum-of-the –years’-digits method of depreciation, the amount of depreciation charged during the year 2004-05 was
- a)Rs. 1,00,000
- b)Rs. 80,000
- c)Rs. 60,000
- d)Rs. 20,000
Correct answer is option 'D'. Can you explain this answer?
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H Ltd. purchased a machinery on April 01, 2000 for Rs. 3,00,000. It is...
Years-digits method, calculate the depreciation expense for the second year.
The sum-of-the-years-digits method is a depreciation method that allocates a higher depreciation expense in the earlier years of an asset's useful life, and a lower expense in the later years.
To calculate the depreciation expense for the second year using the sum-of-the-years-digits method, we need to first determine the total number of years of useful life for the machinery. In this case, the machinery has a useful life of 5 years.
Next, we need to calculate the sum of the years digits. This is done by adding up the digits of the years of useful life. For example, if an asset has a useful life of 5 years, the sum of the years digits would be 15 (1+2+3+4+5).
For the machinery in this example, the sum of the years digits would be:
1 + 2 + 3 + 4 + 5 = 15
To calculate the depreciation expense for the second year, we need to determine the fraction of the total depreciation that should be allocated to the second year. To do this, we use the formula:
Remaining useful life / Sum of the years digits
In this case, the remaining useful life of the machinery after the first year is 4 years. So, the fraction of the total depreciation that should be allocated to the second year is:
4 / 15 = 0.2667
Finally, we can calculate the depreciation expense for the second year by multiplying this fraction by the depreciable cost of the asset (the original cost minus any salvage value). In this case, the depreciable cost is:
Rs. 3,00,000 - Rs. 0 = Rs. 3,00,000
So, the depreciation expense for the second year would be:
0.2667 x Rs. 3,00,000 = Rs. 80,010
The sum-of-the-years-digits method is a depreciation method that allocates a higher depreciation expense in the earlier years of an asset's useful life, and a lower expense in the later years.
To calculate the depreciation expense for the second year using the sum-of-the-years-digits method, we need to first determine the total number of years of useful life for the machinery. In this case, the machinery has a useful life of 5 years.
Next, we need to calculate the sum of the years digits. This is done by adding up the digits of the years of useful life. For example, if an asset has a useful life of 5 years, the sum of the years digits would be 15 (1+2+3+4+5).
For the machinery in this example, the sum of the years digits would be:
1 + 2 + 3 + 4 + 5 = 15
To calculate the depreciation expense for the second year, we need to determine the fraction of the total depreciation that should be allocated to the second year. To do this, we use the formula:
Remaining useful life / Sum of the years digits
In this case, the remaining useful life of the machinery after the first year is 4 years. So, the fraction of the total depreciation that should be allocated to the second year is:
4 / 15 = 0.2667
Finally, we can calculate the depreciation expense for the second year by multiplying this fraction by the depreciable cost of the asset (the original cost minus any salvage value). In this case, the depreciable cost is:
Rs. 3,00,000 - Rs. 0 = Rs. 3,00,000
So, the depreciation expense for the second year would be:
0.2667 x Rs. 3,00,000 = Rs. 80,010
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H Ltd. purchased a machinery on April 01, 2000 for Rs. 3,00,000. It is...
Depreciation in this method is calculated as follows
step 1: the given life of asset is 5 years.
we calculate the sum of 1+2+3....+5 which is 15
step 2: at any given year depreciation is..
cost of asset * (remaining life of asset / step 1)
thus 2004-2005 being the last year
depreciation = 300000*1/15 = 20000.
step 1: the given life of asset is 5 years.
we calculate the sum of 1+2+3....+5 which is 15
step 2: at any given year depreciation is..
cost of asset * (remaining life of asset / step 1)
thus 2004-2005 being the last year
depreciation = 300000*1/15 = 20000.
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H Ltd. purchased a machinery on April 01, 2000 for Rs. 3,00,000. It is estimated that the machinery will have a useful life of 5 years after which it will have no salvage value. If the company follows sum-of-the –years’-digits method of depreciation, the amount of depreciation charged during the year 2004-05 wasa)Rs. 1,00,000b)Rs. 80,000c)Rs. 60,000d)Rs. 20,000Correct answer is option 'D'. Can you explain this answer?
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H Ltd. purchased a machinery on April 01, 2000 for Rs. 3,00,000. It is estimated that the machinery will have a useful life of 5 years after which it will have no salvage value. If the company follows sum-of-the –years’-digits method of depreciation, the amount of depreciation charged during the year 2004-05 wasa)Rs. 1,00,000b)Rs. 80,000c)Rs. 60,000d)Rs. 20,000Correct 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 H Ltd. purchased a machinery on April 01, 2000 for Rs. 3,00,000. It is estimated that the machinery will have a useful life of 5 years after which it will have no salvage value. If the company follows sum-of-the –years’-digits method of depreciation, the amount of depreciation charged during the year 2004-05 wasa)Rs. 1,00,000b)Rs. 80,000c)Rs. 60,000d)Rs. 20,000Correct 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 H Ltd. purchased a machinery on April 01, 2000 for Rs. 3,00,000. It is estimated that the machinery will have a useful life of 5 years after which it will have no salvage value. If the company follows sum-of-the –years’-digits method of depreciation, the amount of depreciation charged during the year 2004-05 wasa)Rs. 1,00,000b)Rs. 80,000c)Rs. 60,000d)Rs. 20,000Correct answer is option 'D'. Can you explain this answer?.
H Ltd. purchased a machinery on April 01, 2000 for Rs. 3,00,000. It is estimated that the machinery will have a useful life of 5 years after which it will have no salvage value. If the company follows sum-of-the –years’-digits method of depreciation, the amount of depreciation charged during the year 2004-05 wasa)Rs. 1,00,000b)Rs. 80,000c)Rs. 60,000d)Rs. 20,000Correct 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 H Ltd. purchased a machinery on April 01, 2000 for Rs. 3,00,000. It is estimated that the machinery will have a useful life of 5 years after which it will have no salvage value. If the company follows sum-of-the –years’-digits method of depreciation, the amount of depreciation charged during the year 2004-05 wasa)Rs. 1,00,000b)Rs. 80,000c)Rs. 60,000d)Rs. 20,000Correct 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 H Ltd. purchased a machinery on April 01, 2000 for Rs. 3,00,000. It is estimated that the machinery will have a useful life of 5 years after which it will have no salvage value. If the company follows sum-of-the –years’-digits method of depreciation, the amount of depreciation charged during the year 2004-05 wasa)Rs. 1,00,000b)Rs. 80,000c)Rs. 60,000d)Rs. 20,000Correct answer is option 'D'. Can you explain this answer?.
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H Ltd. purchased a machinery on April 01, 2000 for Rs. 3,00,000. It is estimated that the machinery will have a useful life of 5 years after which it will have no salvage value. If the company follows sum-of-the –years’-digits method of depreciation, the amount of depreciation charged during the year 2004-05 wasa)Rs. 1,00,000b)Rs. 80,000c)Rs. 60,000d)Rs. 20,000Correct answer is option 'D'. Can you explain this answer?, a detailed solution for H Ltd. purchased a machinery on April 01, 2000 for Rs. 3,00,000. It is estimated that the machinery will have a useful life of 5 years after which it will have no salvage value. If the company follows sum-of-the –years’-digits method of depreciation, the amount of depreciation charged during the year 2004-05 wasa)Rs. 1,00,000b)Rs. 80,000c)Rs. 60,000d)Rs. 20,000Correct answer is option 'D'. Can you explain this answer? has been provided alongside types of H Ltd. purchased a machinery on April 01, 2000 for Rs. 3,00,000. It is estimated that the machinery will have a useful life of 5 years after which it will have no salvage value. If the company follows sum-of-the –years’-digits method of depreciation, the amount of depreciation charged during the year 2004-05 wasa)Rs. 1,00,000b)Rs. 80,000c)Rs. 60,000d)Rs. 20,000Correct answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice H Ltd. purchased a machinery on April 01, 2000 for Rs. 3,00,000. It is estimated that the machinery will have a useful life of 5 years after which it will have no salvage value. If the company follows sum-of-the –years’-digits method of depreciation, the amount of depreciation charged during the year 2004-05 wasa)Rs. 1,00,000b)Rs. 80,000c)Rs. 60,000d)Rs. 20,000Correct answer is option 'D'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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