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A plant and money costing 10,00,000 is depreciated on straight line assuming 10 years working life and zero residual value for four year, At the end of the forth year the machinery was revalued upward by rs 40,000. The remaining useful life was resseasses at 8 years. calculate depreciation for the fifth year.?
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A plant and money costing 10,00,000 is depreciated on straight line as...
Solution:
Given data:
- Cost of plant and machinery: Rs. 10,00,000
- Working life: 10 years
- Residual value: Zero
- Depreciation method: Straight line
- Machinery revalued upward by: Rs. 40,000
- Remaining useful life: 8 years
Depreciation calculation for the first 4 years:
- Depreciation per year = (Cost of plant and machinery - Residual value) / Working life
- Depreciation per year = (10,00,000 - 0) / 10 = Rs. 1,00,000
- Depreciation for the first 4 years = 4 * Rs. 1,00,000 = Rs. 4,00,000
Revaluation of machinery:
- Revaluation amount = Rs. 40,000
- New book value of machinery = Cost of machinery + Revaluation amount
- New book value of machinery = Rs. 10,00,000 + Rs. 40,000 = Rs. 10,40,000
Depreciation calculation for the remaining 8 years:
- Depreciation per year = (New book value of machinery - Residual value) / Remaining useful life
- Depreciation per year = (10,40,000 - 0) / 8 = Rs. 1,30,000
Depreciation for the fifth year:
- Depreciation for the fifth year = Rs. 1,30,000
Explanation:
- The given plant and machinery is depreciated on straight line method, which means the same amount of depreciation is charged every year.
- The working life of the machinery is 10 years and the residual value is zero, which means the machinery will be fully depreciated in 10 years and there will be no value left in it after 10 years.
- The depreciation per year is calculated by dividing the cost of plant and machinery by the working life.
- The depreciation for the first 4 years is calculated by multiplying the yearly depreciation by 4.
- At the end of the fourth year, the machinery is revalued upward by Rs. 40,000. This means the book value of the machinery will increase by Rs. 40,000.
- The new book value of the machinery is calculated by adding the revaluation amount to the cost of machinery.
- The remaining useful life of the machinery is reassessed as 8 years.
- The depreciation per year for the remaining 8 years is calculated by dividing the new book value of the machinery by the remaining useful life.
- The depreciation for the fifth year is calculated by using the depreciation per year for the remaining useful life.
Given data:
- Cost of plant and machinery: Rs. 10,00,000
- Working life: 10 years
- Residual value: Zero
- Depreciation method: Straight line
- Machinery revalued upward by: Rs. 40,000
- Remaining useful life: 8 years
Depreciation calculation for the first 4 years:
- Depreciation per year = (Cost of plant and machinery - Residual value) / Working life
- Depreciation per year = (10,00,000 - 0) / 10 = Rs. 1,00,000
- Depreciation for the first 4 years = 4 * Rs. 1,00,000 = Rs. 4,00,000
Revaluation of machinery:
- Revaluation amount = Rs. 40,000
- New book value of machinery = Cost of machinery + Revaluation amount
- New book value of machinery = Rs. 10,00,000 + Rs. 40,000 = Rs. 10,40,000
Depreciation calculation for the remaining 8 years:
- Depreciation per year = (New book value of machinery - Residual value) / Remaining useful life
- Depreciation per year = (10,40,000 - 0) / 8 = Rs. 1,30,000
Depreciation for the fifth year:
- Depreciation for the fifth year = Rs. 1,30,000
Explanation:
- The given plant and machinery is depreciated on straight line method, which means the same amount of depreciation is charged every year.
- The working life of the machinery is 10 years and the residual value is zero, which means the machinery will be fully depreciated in 10 years and there will be no value left in it after 10 years.
- The depreciation per year is calculated by dividing the cost of plant and machinery by the working life.
- The depreciation for the first 4 years is calculated by multiplying the yearly depreciation by 4.
- At the end of the fourth year, the machinery is revalued upward by Rs. 40,000. This means the book value of the machinery will increase by Rs. 40,000.
- The new book value of the machinery is calculated by adding the revaluation amount to the cost of machinery.
- The remaining useful life of the machinery is reassessed as 8 years.
- The depreciation per year for the remaining 8 years is calculated by dividing the new book value of the machinery by the remaining useful life.
- The depreciation for the fifth year is calculated by using the depreciation per year for the remaining useful life.
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A plant and money costing 10,00,000 is depreciated on straight line assuming 10 years working life and zero residual value for four year, At the end of the forth year the machinery was revalued upward by rs 40,000. The remaining useful life was resseasses at 8 years. calculate depreciation for the fifth year.?
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A plant and money costing 10,00,000 is depreciated on straight line assuming 10 years working life and zero residual value for four year, At the end of the forth year the machinery was revalued upward by rs 40,000. The remaining useful life was resseasses at 8 years. calculate depreciation for the fifth year.? 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 A plant and money costing 10,00,000 is depreciated on straight line assuming 10 years working life and zero residual value for four year, At the end of the forth year the machinery was revalued upward by rs 40,000. The remaining useful life was resseasses at 8 years. calculate depreciation for the fifth year.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A plant and money costing 10,00,000 is depreciated on straight line assuming 10 years working life and zero residual value for four year, At the end of the forth year the machinery was revalued upward by rs 40,000. The remaining useful life was resseasses at 8 years. calculate depreciation for the fifth year.?.
A plant and money costing 10,00,000 is depreciated on straight line assuming 10 years working life and zero residual value for four year, At the end of the forth year the machinery was revalued upward by rs 40,000. The remaining useful life was resseasses at 8 years. calculate depreciation for the fifth year.? 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 A plant and money costing 10,00,000 is depreciated on straight line assuming 10 years working life and zero residual value for four year, At the end of the forth year the machinery was revalued upward by rs 40,000. The remaining useful life was resseasses at 8 years. calculate depreciation for the fifth year.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A plant and money costing 10,00,000 is depreciated on straight line assuming 10 years working life and zero residual value for four year, At the end of the forth year the machinery was revalued upward by rs 40,000. The remaining useful life was resseasses at 8 years. calculate depreciation for the fifth year.?.
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A plant and money costing 10,00,000 is depreciated on straight line assuming 10 years working life and zero residual value for four year, At the end of the forth year the machinery was revalued upward by rs 40,000. The remaining useful life was resseasses at 8 years. calculate depreciation for the fifth year.?, a detailed solution for A plant and money costing 10,00,000 is depreciated on straight line assuming 10 years working life and zero residual value for four year, At the end of the forth year the machinery was revalued upward by rs 40,000. The remaining useful life was resseasses at 8 years. calculate depreciation for the fifth year.? has been provided alongside types of A plant and money costing 10,00,000 is depreciated on straight line assuming 10 years working life and zero residual value for four year, At the end of the forth year the machinery was revalued upward by rs 40,000. The remaining useful life was resseasses at 8 years. calculate depreciation for the fifth year.? theory, EduRev gives you an
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