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The balance of machine on 31st March 2010 is Rs. 72,900 (after charging depreciation of the year). The machine was purchased on 1st April 2007 charging depreciation @10% p.a. by diminishing balance method. The cost price of the machine as on 1st April 2007 would be
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The balance of machine on 31st March 2010 is Rs. 72,900 (after chargin...
Given Information
- Balance of the machine on 31st March 2010: Rs. 72,900
- Depreciation rate: 10% per annum
- Purchase date of the machine: 1st April 2007
Depreciation Calculation
To find the original cost of the machine, we need to work backward from the balance as of 31st March 2010. Since depreciation is charged using the diminishing balance method, we can establish the following relationships:
Step 1: Calculate the balance at the end of each year
- 31st March 2008 (End of Year 1):
Let the cost price be 'C'.
Depreciation for the first year = 10% of C = 0.1C.
Balance = C - 0.1C = 0.9C.
- 31st March 2009 (End of Year 2):
Depreciation = 10% of 0.9C = 0.09C.
Balance = 0.9C - 0.09C = 0.81C.
- 31st March 2010 (End of Year 3):
Depreciation = 10% of 0.81C = 0.081C.
Balance = 0.81C - 0.081C = 0.729C.
Step 2: Set up the equation
Given that the balance on 31st March 2010 is Rs. 72,900, we can write:
0.729C = 72,900
Step 3: Solve for C
To find the original cost price (C):
C = 72,900 / 0.729
C = Rs. 100,000.
Conclusion
The cost price of the machine as on 1st April 2007 would be Rs. 100,000.
- Balance of the machine on 31st March 2010: Rs. 72,900
- Depreciation rate: 10% per annum
- Purchase date of the machine: 1st April 2007
Depreciation Calculation
To find the original cost of the machine, we need to work backward from the balance as of 31st March 2010. Since depreciation is charged using the diminishing balance method, we can establish the following relationships:
Step 1: Calculate the balance at the end of each year
- 31st March 2008 (End of Year 1):
Let the cost price be 'C'.
Depreciation for the first year = 10% of C = 0.1C.
Balance = C - 0.1C = 0.9C.
- 31st March 2009 (End of Year 2):
Depreciation = 10% of 0.9C = 0.09C.
Balance = 0.9C - 0.09C = 0.81C.
- 31st March 2010 (End of Year 3):
Depreciation = 10% of 0.81C = 0.081C.
Balance = 0.81C - 0.081C = 0.729C.
Step 2: Set up the equation
Given that the balance on 31st March 2010 is Rs. 72,900, we can write:
0.729C = 72,900
Step 3: Solve for C
To find the original cost price (C):
C = 72,900 / 0.729
C = Rs. 100,000.
Conclusion
The cost price of the machine as on 1st April 2007 would be Rs. 100,000.
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The balance of machine on 31st March 2010 is Rs. 72,900 (after charging depreciation of the year). The machine was purchased on 1st April 2007 charging depreciation @10% p.a. by diminishing balance method. The cost price of the machine as on 1st April 2007 would be? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The balance of machine on 31st March 2010 is Rs. 72,900 (after charging depreciation of the year). The machine was purchased on 1st April 2007 charging depreciation @10% p.a. by diminishing balance method. The cost price of the machine as on 1st April 2007 would be? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The balance of machine on 31st March 2010 is Rs. 72,900 (after charging depreciation of the year). The machine was purchased on 1st April 2007 charging depreciation @10% p.a. by diminishing balance method. The cost price of the machine as on 1st April 2007 would be?.
The balance of machine on 31st March 2010 is Rs. 72,900 (after charging depreciation of the year). The machine was purchased on 1st April 2007 charging depreciation @10% p.a. by diminishing balance method. The cost price of the machine as on 1st April 2007 would be? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The balance of machine on 31st March 2010 is Rs. 72,900 (after charging depreciation of the year). The machine was purchased on 1st April 2007 charging depreciation @10% p.a. by diminishing balance method. The cost price of the machine as on 1st April 2007 would be? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The balance of machine on 31st March 2010 is Rs. 72,900 (after charging depreciation of the year). The machine was purchased on 1st April 2007 charging depreciation @10% p.a. by diminishing balance method. The cost price of the machine as on 1st April 2007 would be?.
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