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On 1st January, 2009, Alpha Ltd. purchased a machine for Rs.50,000 and spent Rs.4,000 on its carriage and Rs.2,000 on its installation. On the date of purchase, it was estimated that the effective life of the machine will be 10 years and after 10 years its scrap value will be Rs.6,000. Depreciation is charged on is straight line basis. Depreciation for the year 2009 will be?
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On 1st January, 2009, Alpha Ltd. purchased a machine for Rs.50,000 and...
Calculation of Depreciation for the Year 2009



  • Cost of the machine = Rs.50,000

  • Carriage expenses = Rs.4,000

  • Installation expenses = Rs.2,000

  • Total cost = Rs.56,000

  • Scrap value = Rs.6,000

  • Effective life = 10 years



Straight Line Method for Depreciation


Straight line method is a commonly used method for calculating depreciation. According to this method, the depreciation is charged at a fixed rate every year, which is calculated by dividing the cost of the asset by its effective life.


Calculation of Annual Depreciation


The annual depreciation can be calculated as follows:


Annual Depreciation = (Cost of the asset - Scrap value) / Effective life

Annual Depreciation = (Rs.56,000 - Rs.6,000) / 10

Annual Depreciation = Rs.5,000

Conclusion


Therefore, the depreciation for the year 2009 will be Rs.5,000.
Community Answer
On 1st January, 2009, Alpha Ltd. purchased a machine for Rs.50,000 and...
50000+2000+4000=Rs 56000 cost
straight line =cost-scrap value/total usuful life
=56000-6000/10
=rs5000 for year 2009
for every year depreciation will be Rs 5000 because it straight line method
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On 1st January, 2009, Alpha Ltd. purchased a machine for Rs.50,000 and spent Rs.4,000 on its carriage and Rs.2,000 on its installation. On the date of purchase, it was estimated that the effective life of the machine will be 10 years and after 10 years its scrap value will be Rs.6,000. Depreciation is charged on is straight line basis. Depreciation for the year 2009 will be?
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On 1st January, 2009, Alpha Ltd. purchased a machine for Rs.50,000 and spent Rs.4,000 on its carriage and Rs.2,000 on its installation. On the date of purchase, it was estimated that the effective life of the machine will be 10 years and after 10 years its scrap value will be Rs.6,000. Depreciation is charged on is straight line basis. Depreciation for the year 2009 will be? 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 On 1st January, 2009, Alpha Ltd. purchased a machine for Rs.50,000 and spent Rs.4,000 on its carriage and Rs.2,000 on its installation. On the date of purchase, it was estimated that the effective life of the machine will be 10 years and after 10 years its scrap value will be Rs.6,000. Depreciation is charged on is straight line basis. Depreciation for the year 2009 will be? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1st January, 2009, Alpha Ltd. purchased a machine for Rs.50,000 and spent Rs.4,000 on its carriage and Rs.2,000 on its installation. On the date of purchase, it was estimated that the effective life of the machine will be 10 years and after 10 years its scrap value will be Rs.6,000. Depreciation is charged on is straight line basis. Depreciation for the year 2009 will be?.
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