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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 4th year =
  • a)
    20,000
  • b)
    16,000
  • c)
    12,800
  • d)
    10,240
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Consider the following information:I. Rate of depreciation under the w...

Given:

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.

To find: Depreciation for the 4th year.

Explanation:

The written down method is a method of calculating depreciation where the asset's value is reduced by a fixed percentage each year.

The formula to calculate depreciation under the written down method is:

Depreciation = (Original cost - Residual value) x Rate of depreciation

Calculation:

Original cost of the asset = Rs.1,00,000

Residual value of the asset at the end of useful life = Rs.40,960

Rate of depreciation = 20%

Depreciation for the 4th year can be calculated as follows:

Depreciation = (Original cost - Residual value) x Rate of depreciation

= (1,00,000 - 40,960) x 20%

= 59,040 x 20%

= 11,808

Therefore, the depreciation for the 4th year is Rs.11,808.

Answer: D) 10,240

Please note that the given options do not match with the calculated value. The correct answer should be 11,808 according to the calculations.
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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 4th year =a)20,000b)16,000c)12,800d)10,240Correct answer is option 'D'. Can you explain this answer?
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