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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 under straight line method. Depreciation rate = 10%. Annual Depreciation = _________.
- a)13000
- b)17000
- c)21000
- d)25000
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
Amit Ltd. purchased a machine on 01.01.2003 for Rs. 1,20,000. Installa...
There are two methods of finding out the depreciation under SLM method
(1) formula method
Depreciation = (cost- scrap value ) /
estimated life span
(2) rate method
depreciation = cost * rate/100
#### if in the question you have given the information of both type of methods then always use RATE method because it is our priority...
(1) formula method
Depreciation = (cost- scrap value ) /
estimated life span
(2) rate method
depreciation = cost * rate/100
#### if in the question you have given the information of both type of methods then always use RATE method because it is our priority...
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Amit Ltd. purchased a machine on 01.01.2003 for Rs. 1,20,000. Installa...
Calculation of Annual Depreciation:
- Cost of the machine = Rs. 1,20,000
- Installation expenses = Rs. 10,000
- Total cost = Rs. 1,30,000
- Residual value after 5 years = Rs. 5,000
- Depreciation rate = 10%
Annual Depreciation Calculation:
- Depreciable amount = Cost of the machine + Installation expenses - Residual value
- Depreciable amount = Rs. 1,30,000 - Rs. 5,000 = Rs. 1,25,000
- Annual Depreciation = Depreciable amount / Useful life in years
- Useful life = 5 years
- Annual Depreciation = Rs. 1,25,000 / 5 = Rs. 25,000
However, repairs expenses incurred during the year should be considered. Since repairs were done on 01.07.2003, only half of the year's depreciation will be charged.
- Half-year Depreciation = Annual Depreciation / 2 = Rs. 25,000 / 2 = Rs. 12,500
- Adjusted Annual Depreciation = Rs. 25,000 - Rs. 2,000 = Rs. 13,000
Therefore, the correct answer is option A) Rs. 13,000.
- Cost of the machine = Rs. 1,20,000
- Installation expenses = Rs. 10,000
- Total cost = Rs. 1,30,000
- Residual value after 5 years = Rs. 5,000
- Depreciation rate = 10%
Annual Depreciation Calculation:
- Depreciable amount = Cost of the machine + Installation expenses - Residual value
- Depreciable amount = Rs. 1,30,000 - Rs. 5,000 = Rs. 1,25,000
- Annual Depreciation = Depreciable amount / Useful life in years
- Useful life = 5 years
- Annual Depreciation = Rs. 1,25,000 / 5 = Rs. 25,000
However, repairs expenses incurred during the year should be considered. Since repairs were done on 01.07.2003, only half of the year's depreciation will be charged.
- Half-year Depreciation = Annual Depreciation / 2 = Rs. 25,000 / 2 = Rs. 12,500
- Adjusted Annual Depreciation = Rs. 25,000 - Rs. 2,000 = Rs. 13,000
Therefore, the correct answer is option A) Rs. 13,000.
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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 under straight line method. Depreciation rate = 10%. Annual Depreciation = _________.a)13000b)17000c)21000d)25000Correct answer is option 'A'. 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 under straight line method. Depreciation rate = 10%. Annual Depreciation = _________.a)13000b)17000c)21000d)25000Correct answer is option 'A'. 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 under straight line method. Depreciation rate = 10%. Annual Depreciation = _________.a)13000b)17000c)21000d)25000Correct answer is option 'A'. 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 under straight line method. Depreciation rate = 10%. Annual Depreciation = _________.a)13000b)17000c)21000d)25000Correct answer is option 'A'. 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 under straight line method. Depreciation rate = 10%. Annual Depreciation = _________.a)13000b)17000c)21000d)25000Correct answer is option 'A'. 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 under straight line method. Depreciation rate = 10%. Annual Depreciation = _________.a)13000b)17000c)21000d)25000Correct answer is option 'A'. 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 under straight line method. Depreciation rate = 10%. Annual Depreciation = _________.a)13000b)17000c)21000d)25000Correct answer is option 'A'. Can you explain this answer?.
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