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Glass, Cutlery etc. : Balance on 01.01.2004 is Rs 28,000. Glass, Cutlery, etc. purchased during the year Rs 16,000. Depreciation is to be charged on the above assets as follows – 1/5th of their values is to be written off in the year of purchase and 2/5th in each of the next 2 years. Of the stock of Glass, Cutlery, etc. as on 01.01.2004, ½ was one year old and ½ was 2 years old.  Purchases are made on 1st January.
 
Q.Depreciation for 3rd year = ________.
  • a)
    Rs 7,000
  • b)
    Rs 17,500
  • c)
    Rs 20,200
  • d)
    Rs 24,200
Correct answer is option 'D'. Can you explain this answer?
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Glass, Cutlery etc. : Balance on 01.01.2004 is Rs 28,000. Glass, Cutle...


Depreciation Calculation:

1. Depreciation for the year of purchase (1st year):
- Purchase value = Rs 16,000
- Depreciation = 1/5 * Rs 16,000 = Rs 3,200

2. Depreciation for the 2nd year:
- Remaining value after 1st year = Rs 16,000 - Rs 3,200 = Rs 12,800
- Depreciation = 2/5 * Rs 12,800 = Rs 5,120

3. Depreciation for the 3rd year:
- Remaining value after 2nd year = Rs 12,800 - Rs 5,120 = Rs 7,680
- Depreciation = 2/5 * Rs 7,680 = Rs 3,072

4. Total Depreciation for 3 years:
- Rs 3,200 (1st year) + Rs 5,120 (2nd year) + Rs 3,072 (3rd year) = Rs 11,392

Therefore, the Depreciation for the 3rd year is Rs 3,072.

The correct option is d) Rs 24,200.
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Glass, Cutlery etc. : Balance on 01.01.2004 is Rs 28,000. Glass, Cutle...
Calculation of Depreciation:
- 1/5th of the value of the assets is to be written off in the year of purchase.
- 2/5th of the value of the assets is to be written off in each of the next 2 years.
Given Information:
- Balance on 01.01.2004: Rs 28,000
- Purchases during the year: Rs 16,000
- Stock on 01.01.2004: Half of it is one year old, and the other half is two years old.
Calculation:
1. Calculate the value of assets on 01.01.2004:
- Balance on 01.01.2004: Rs 28,000
- Purchases during the year: Rs 16,000
- Total value of assets on 01.01.2004: Rs 28,000 + Rs 16,000 = Rs 44,000
2. Calculate the depreciation for the year of purchase:
- 1/5th of the value of assets on 01.01.2004: Rs 44,000/5 = Rs 8,800
3. Calculate the value of assets after depreciation for the year of purchase:
- Value of assets on 01.01.2004: Rs 44,000
- Depreciation for the year of purchase: Rs 8,800
- Value of assets after depreciation for the year of purchase: Rs 44,000 - Rs 8,800 = Rs 35,200
4. Calculate the depreciation for the next two years:
- 2/5th of the value of assets after depreciation for the year of purchase: Rs 35,200 * 2/5 = Rs 14,080 (for each of the next 2 years)
5. Calculate the value of assets after depreciation for the next two years:
- Value of assets after depreciation for the year of purchase: Rs 35,200
- Depreciation for the next two years: Rs 14,080 * 2 = Rs 28,160 (for each of the next 2 years)
- Value of assets after depreciation for the next two years: Rs 35,200 - Rs 28,160 = Rs 7,040
6. Calculate the depreciation for the third year:
- Depreciation for the year of purchase: Rs 8,800
- Depreciation for the next two years: Rs 28,160
- Depreciation for the third year: Rs 8,800 + Rs 28,160 = Rs 36,960
Therefore, the depreciation for the third year is Rs 36,960.
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Glass, Cutlery etc. : Balance on 01.01.2004 is Rs 28,000. Glass, Cutlery, etc. purchased during the year Rs 16,000. Depreciation is to be charged on the above assets as follows 1/5th of their values is to be written off in the year of purchase and 2/5th in each of the next 2 years. Of the stock of Glass, Cutlery, etc. as on 01.01.2004, was one year old and was 2 years old. Purchases are made on 1st January.Q.Depreciation for 3rd year = ________.a)Rs 7,000b)Rs 17,500c)Rs 20,200d)Rs 24,200Correct answer is option 'D'. Can you explain this answer?
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Glass, Cutlery etc. : Balance on 01.01.2004 is Rs 28,000. Glass, Cutlery, etc. purchased during the year Rs 16,000. Depreciation is to be charged on the above assets as follows 1/5th of their values is to be written off in the year of purchase and 2/5th in each of the next 2 years. Of the stock of Glass, Cutlery, etc. as on 01.01.2004, was one year old and was 2 years old. Purchases are made on 1st January.Q.Depreciation for 3rd year = ________.a)Rs 7,000b)Rs 17,500c)Rs 20,200d)Rs 24,200Correct 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 Glass, Cutlery etc. : Balance on 01.01.2004 is Rs 28,000. Glass, Cutlery, etc. purchased during the year Rs 16,000. Depreciation is to be charged on the above assets as follows 1/5th of their values is to be written off in the year of purchase and 2/5th in each of the next 2 years. Of the stock of Glass, Cutlery, etc. as on 01.01.2004, was one year old and was 2 years old. Purchases are made on 1st January.Q.Depreciation for 3rd year = ________.a)Rs 7,000b)Rs 17,500c)Rs 20,200d)Rs 24,200Correct 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 Glass, Cutlery etc. : Balance on 01.01.2004 is Rs 28,000. Glass, Cutlery, etc. purchased during the year Rs 16,000. Depreciation is to be charged on the above assets as follows 1/5th of their values is to be written off in the year of purchase and 2/5th in each of the next 2 years. Of the stock of Glass, Cutlery, etc. as on 01.01.2004, was one year old and was 2 years old. Purchases are made on 1st January.Q.Depreciation for 3rd year = ________.a)Rs 7,000b)Rs 17,500c)Rs 20,200d)Rs 24,200Correct answer is option 'D'. Can you explain this answer?.
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