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A machine is purchased for Rs.10,000,00/- and has an estimated life of 10 years. The salvage value at the end of 10 years is Rs.1,50,000/-. The book value of the machine at the end of 5 years using general straight-line method of evaluation of depreciation is
- a)Rs. 4,75,000/-
- b)Rs. 5,75,000/-
- c)Rs. 6,50,000/-
- d)Rs. 8,50,000/-
Correct answer is option 'B'. Can you explain this answer?
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Verified Answer
A machine is purchased for Rs.10,000,00/- and has an estimated life o...
It is given by 10 00 000 - (10 00 000 - 1 50 000) x 5/10 = Rs.5 75 000/-
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A machine is purchased for Rs.10,000,00/- and has an estimated life o...
Calculation of Depreciation:
- The machine is purchased for Rs.10,00,000/-
- The salvage value at the end of 10 years is Rs.1,50,000/-
- The estimated life of the machine is 10 years
- We need to find the book value of the machine at the end of 5 years
Straight-Line Method of Depreciation:
- In the straight-line method, the depreciation expense is allocated evenly over the useful life of the asset.
- The formula to calculate the annual depreciation expense is:
Depreciation Expense = (Cost of Asset - Salvage Value) / Useful Life
Calculation:
- Cost of Asset = Rs.10,00,000/-
- Salvage Value = Rs.1,50,000/-
- Useful Life = 10 years
- Depreciation Expense per year = (Rs.10,00,000 - Rs.1,50,000) / 10
= Rs.8,50,000 / 10
= Rs.85,000/-
- To find the book value of the machine at the end of 5 years, we need to subtract the accumulated depreciation from the cost of the asset.
Accumulated Depreciation:
- Accumulated Depreciation = Depreciation Expense per year * Number of years
- Accumulated Depreciation at the end of 5 years = Rs.85,000 * 5
= Rs.4,25,000/-
Book Value at the end of 5 years:
- Book Value = Cost of Asset - Accumulated Depreciation
- Book Value at the end of 5 years = Rs.10,00,000 - Rs.4,25,000
= Rs.5,75,000/-
Therefore, the book value of the machine at the end of 5 years using the general straight-line method of evaluation of depreciation is Rs.5,75,000/- (Option B).
- The machine is purchased for Rs.10,00,000/-
- The salvage value at the end of 10 years is Rs.1,50,000/-
- The estimated life of the machine is 10 years
- We need to find the book value of the machine at the end of 5 years
Straight-Line Method of Depreciation:
- In the straight-line method, the depreciation expense is allocated evenly over the useful life of the asset.
- The formula to calculate the annual depreciation expense is:
Depreciation Expense = (Cost of Asset - Salvage Value) / Useful Life
Calculation:
- Cost of Asset = Rs.10,00,000/-
- Salvage Value = Rs.1,50,000/-
- Useful Life = 10 years
- Depreciation Expense per year = (Rs.10,00,000 - Rs.1,50,000) / 10
= Rs.8,50,000 / 10
= Rs.85,000/-
- To find the book value of the machine at the end of 5 years, we need to subtract the accumulated depreciation from the cost of the asset.
Accumulated Depreciation:
- Accumulated Depreciation = Depreciation Expense per year * Number of years
- Accumulated Depreciation at the end of 5 years = Rs.85,000 * 5
= Rs.4,25,000/-
Book Value at the end of 5 years:
- Book Value = Cost of Asset - Accumulated Depreciation
- Book Value at the end of 5 years = Rs.10,00,000 - Rs.4,25,000
= Rs.5,75,000/-
Therefore, the book value of the machine at the end of 5 years using the general straight-line method of evaluation of depreciation is Rs.5,75,000/- (Option B).
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A machine is purchased for Rs.10,000,00/- and has an estimated life of 10 years. The salvage value at the end of 10 years is Rs.1,50,000/-. The book value of the machine at the end of 5 years using general straight-line method of evaluation of depreciation isa)Rs. 4,75,000/-b)Rs. 5,75,000/-c)Rs. 6,50,000/-d)Rs. 8,50,000/-Correct answer is option 'B'. Can you explain this answer?
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A machine is purchased for Rs.10,000,00/- and has an estimated life of 10 years. The salvage value at the end of 10 years is Rs.1,50,000/-. The book value of the machine at the end of 5 years using general straight-line method of evaluation of depreciation isa)Rs. 4,75,000/-b)Rs. 5,75,000/-c)Rs. 6,50,000/-d)Rs. 8,50,000/-Correct answer is option 'B'. Can you explain this answer? for Railways 2024 is part of Railways preparation. The Question and answers have been prepared according to the Railways exam syllabus. Information about A machine is purchased for Rs.10,000,00/- and has an estimated life of 10 years. The salvage value at the end of 10 years is Rs.1,50,000/-. The book value of the machine at the end of 5 years using general straight-line method of evaluation of depreciation isa)Rs. 4,75,000/-b)Rs. 5,75,000/-c)Rs. 6,50,000/-d)Rs. 8,50,000/-Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for Railways 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A machine is purchased for Rs.10,000,00/- and has an estimated life of 10 years. The salvage value at the end of 10 years is Rs.1,50,000/-. The book value of the machine at the end of 5 years using general straight-line method of evaluation of depreciation isa)Rs. 4,75,000/-b)Rs. 5,75,000/-c)Rs. 6,50,000/-d)Rs. 8,50,000/-Correct answer is option 'B'. Can you explain this answer?.
A machine is purchased for Rs.10,000,00/- and has an estimated life of 10 years. The salvage value at the end of 10 years is Rs.1,50,000/-. The book value of the machine at the end of 5 years using general straight-line method of evaluation of depreciation isa)Rs. 4,75,000/-b)Rs. 5,75,000/-c)Rs. 6,50,000/-d)Rs. 8,50,000/-Correct answer is option 'B'. Can you explain this answer? for Railways 2024 is part of Railways preparation. The Question and answers have been prepared according to the Railways exam syllabus. Information about A machine is purchased for Rs.10,000,00/- and has an estimated life of 10 years. The salvage value at the end of 10 years is Rs.1,50,000/-. The book value of the machine at the end of 5 years using general straight-line method of evaluation of depreciation isa)Rs. 4,75,000/-b)Rs. 5,75,000/-c)Rs. 6,50,000/-d)Rs. 8,50,000/-Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for Railways 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A machine is purchased for Rs.10,000,00/- and has an estimated life of 10 years. The salvage value at the end of 10 years is Rs.1,50,000/-. The book value of the machine at the end of 5 years using general straight-line method of evaluation of depreciation isa)Rs. 4,75,000/-b)Rs. 5,75,000/-c)Rs. 6,50,000/-d)Rs. 8,50,000/-Correct answer is option 'B'. Can you explain this answer?.
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ample number of questions to practice A machine is purchased for Rs.10,000,00/- and has an estimated life of 10 years. The salvage value at the end of 10 years is Rs.1,50,000/-. The book value of the machine at the end of 5 years using general straight-line method of evaluation of depreciation isa)Rs. 4,75,000/-b)Rs. 5,75,000/-c)Rs. 6,50,000/-d)Rs. 8,50,000/-Correct answer is option 'B'. Can you explain this answer? tests, examples and also practice Railways tests.
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