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Consider the following information:
I. Rate of depreciation under the written down method = 20%.
II. Original cost of the asset = Rs.1,00,000.
III. Residual value of the asset at the end of useful life = Rs.40,960.
 
Q.Depreciation for 3rd year = 
  • a)
    20,000
  • b)
    16,000
  • c)
    12,800
  • d)
    10,240
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
Consider the following information:I. Rate of depreciation under the w...

To calculate the depreciation for the 3rd year, we will use the written down method formula:

Depreciation = (Book Value at the beginning of the year) x (Rate of depreciation)

Let's calculate the book value at the beginning of the 3rd year:

Book Value at the beginning of the 3rd year = Original cost - Depreciation for 2 years

Depreciation for 2 years = (Original cost) x (Rate of depreciation)

Depreciation for 2 years = Rs.1,00,000 x 20% = Rs.20,000

Book Value at the beginning of the 3rd year = Rs.1,00,000 - Rs.20,000 = Rs.80,000

Now, let's calculate the depreciation for the 3rd year:

Depreciation for 3rd year = (Book Value at the beginning of the 3rd year) x (Rate of depreciation)

Depreciation for 3rd year = Rs.80,000 x 20% = Rs.16,000

Therefore, the depreciation for the 3rd year is Rs.16,000.

Answer: B) Rs.16,000
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Most Upvoted Answer
Consider the following information:I. Rate of depreciation under the w...
Depreciation for:
• 1st year = 1,00,000 * 20/100 =20,000
• 2nd year = (1,00,000-20,000) * 20/100 = 80,000 * 20/100 = 16000
•3rd year = (80,000-16,000) * 20/100 = 64000*20/100 = 12800
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Community Answer
Consider the following information:I. Rate of depreciation under the w...


Given Information:
- Rate of depreciation under the written down method: 20%
- Original cost of the asset: Rs.1,00,000
- Residual value of the asset at the end of useful life: Rs.40,960

Calculation for Depreciation:
- Depreciation for the 3rd year can be calculated using the formula:
Depreciation = (Original cost - Residual value) * Rate of depreciation
- Substituting the values into the formula:
Depreciation = (1,00,000 - 40,960) * 20%
Depreciation = 59,040 * 20%
Depreciation = Rs.11,808

Correct Answer:
- The correct option for the depreciation for the 3rd year is Rs.12,800 (Option C).

Therefore, the depreciation for the 3rd year using the written down method is Rs.12,800.
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Consider the following information:I. Rate of depreciation under the written down method = 20%.II. Original cost of the asset = Rs.1,00,000.III. Residual value of the asset at the end of useful life = Rs.40,960.Q.Depreciation for 3rd year =a)20,000b)16,000c)12,800d)10,240Correct answer is option 'C'. Can you explain this answer?
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