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The useful life of a machine is estimated to be 10 years and cost is 10000 rate of depreciation is 10% per annum the scrap value at the end of its life is?
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The useful life of a machine is estimated to be 10 years and cost is 1...
Useful Life and Depreciation of a Machine
Calculating Depreciation
Calculating Scrap Value
When a company buys a machine, it is expected to last for a certain number of years before it becomes useless. This is known as the useful life of the machine. During this period, the machine will depreciate in value, which means that its value will decrease over time. The cost of the machine, the rate of depreciation, and the useful life are all factors that need to be considered when calculating the scrap value of the machine.
Calculating Depreciation
The rate of depreciation is usually expressed as a percentage per annum. In this case, the rate of depreciation is 10% per annum. This means that every year, the value of the machine will decrease by 10% of its original value. To calculate the depreciation for each year, we can use the straight-line method. This method involves dividing the cost of the machine by its useful life and then multiplying the result by the number of years it has been in use.
Calculating Scrap Value
The scrap value of the machine is the amount that can be obtained by selling it at the end of its useful life. This value is usually lower than the original cost of the machine. To calculate the scrap value, we need to subtract the total depreciation from the original cost of the machine. Using the straight-line method, we can calculate the total depreciation by multiplying the annual depreciation by the number of years of the useful life. In this case, the total depreciation would be:
Total depreciation = Annual depreciation x Number of years
Total depreciation = 10000 x 10% x 10 = 10000
The original cost of the machine was 10000, so the scrap value would be:
Scrap value = Original cost - Total depreciation
Scrap value = 10000 - 10000 = 0
In this case, the scrap value of the machine is zero, which means that it has no resale value at the end of its useful life.
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The useful life of a machine is estimated to be 10 years and cost is 1...
3486.78 rupee in diminshing balance method and 0 in fixed installment method .
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The useful life of a machine is estimated to be 10 years and cost is 10000 rate of depreciation is 10% per annum the scrap value at the end of its life is? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about The useful life of a machine is estimated to be 10 years and cost is 10000 rate of depreciation is 10% per annum the scrap value at the end of its life is? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The useful life of a machine is estimated to be 10 years and cost is 10000 rate of depreciation is 10% per annum the scrap value at the end of its life is?.
The useful life of a machine is estimated to be 10 years and cost is 10000 rate of depreciation is 10% per annum the scrap value at the end of its life is? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about The useful life of a machine is estimated to be 10 years and cost is 10000 rate of depreciation is 10% per annum the scrap value at the end of its life is? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The useful life of a machine is estimated to be 10 years and cost is 10000 rate of depreciation is 10% per annum the scrap value at the end of its life is?.
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