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A company purchased plant for peace 40000 the useful life of the plant is 10 years and the estimated scrap value is rupees 40000 determine and the rate of depreciation man the management wants would appreciate its by straight line method?
Most Upvoted Answer
A company purchased plant for peace 40000 the useful life of the plant...
Depreciation Calculation for Plant for Peace
Details Provided:
- Cost of Plant = Rupees 40000
- Useful Life = 10 years
- Scrap Value = Rupees 40000
- Depreciation Method = Straight Line Method
Straight Line Method
Straight line method is the simplest method of depreciation calculation. In this method, equal amount of depreciation is charged every year until the book value of the asset becomes zero at the end of its useful life. The formula for straight line method is:
Annual Depreciation = (Cost of Asset - Scrap Value) / Useful Life
Calculation of Depreciation for Plant for Peace
Using the straight line method, we can calculate the annual depreciation of Plant for Peace as follows:
Annual Depreciation = (Rupees 40000 - Rupees 40000) / 10 = Rupees 0
Since the scrap value of the plant is equal to its cost, the annual depreciation calculated is zero. However, the company can still claim the entire cost of the plant as an expense over its useful life of 10 years. This will reduce the taxable income of the company and hence reduce its tax liability.
Conclusion
In conclusion, the rate of depreciation for Plant for Peace using straight line method is zero. This means that the entire cost of the plant can be claimed as an expense over its useful life of 10 years. This will help in reducing the tax liability of the company.
Community Answer
A company purchased plant for peace 40000 the useful life of the plant...
Cost of the plant = 4,00,000
scrap value = 40000
useful life of plant = 10 years
annual depreciation = (400000-40000) / 10
= 36000
rate of depreciation = annual depreciation/( cost of asset- scrap value) * 100
36000/3,60,000 * 100 = 10%
scrap value = 40000
useful life of plant = 10 years
annual depreciation = (400000-40000) / 10
= 36000
rate of depreciation = annual depreciation/( cost of asset- scrap value) * 100
36000/3,60,000 * 100 = 10%
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A company purchased plant for peace 40000 the useful life of the plant is 10 years and the estimated scrap value is rupees 40000 determine and the rate of depreciation man the management wants would appreciate its by straight line method?
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A company purchased plant for peace 40000 the useful life of the plant is 10 years and the estimated scrap value is rupees 40000 determine and the rate of depreciation man the management wants would appreciate its by straight line method? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A company purchased plant for peace 40000 the useful life of the plant is 10 years and the estimated scrap value is rupees 40000 determine and the rate of depreciation man the management wants would appreciate its by straight line method? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company purchased plant for peace 40000 the useful life of the plant is 10 years and the estimated scrap value is rupees 40000 determine and the rate of depreciation man the management wants would appreciate its by straight line method?.
A company purchased plant for peace 40000 the useful life of the plant is 10 years and the estimated scrap value is rupees 40000 determine and the rate of depreciation man the management wants would appreciate its by straight line method? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A company purchased plant for peace 40000 the useful life of the plant is 10 years and the estimated scrap value is rupees 40000 determine and the rate of depreciation man the management wants would appreciate its by straight line method? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company purchased plant for peace 40000 the useful life of the plant is 10 years and the estimated scrap value is rupees 40000 determine and the rate of depreciation man the management wants would appreciate its by straight line method?.
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