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If the original cost of a building is Rs. 25,00,000/- and its scrap value after 55 years is Rs.25,000/-,
then its annual depreciation (in Rs.) using straight line method is
  • a)
    25000
  • b)
    35000
  • c)
    45000
  • d)
    55000
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
If the original cost of a building is Rs. 25,00,000/- and its scrap va...
Understanding Depreciation
Depreciation is the method of allocating the cost of a tangible asset over its useful life. The Straight Line Method is one of the simplest ways to calculate depreciation, where the asset's value is reduced by the same amount each year.
Given Data
- Original Cost of Building: Rs. 25,00,000/-
- Scrap Value after 55 years: Rs. 25,000/-
- Useful Life: 55 years
Calculation of Annual Depreciation
To find the annual depreciation using the Straight Line Method, we can use the formula:
Annual Depreciation = (Cost of Asset - Scrap Value) / Useful Life
Step-by-Step Calculation:
- Cost of Asset: Rs. 25,00,000/-
- Scrap Value: Rs. 25,000/-
- Depreciable Amount:
- Rs. 25,00,000 - Rs. 25,000 = Rs. 24,75,000/-
- Useful Life: 55 years
- Annual Depreciation:
- Rs. 24,75,000 / 55 = Rs. 45,000/-
Conclusion
The annual depreciation of the building, using the Straight Line Method, is Rs. 45,000/-. Therefore, the correct answer is option 'C'.
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If the original cost of a building is Rs. 25,00,000/- and its scrap value after 55 years is Rs.25,000/-,then its annual depreciation (in Rs.) using straight line method isa)25000b)35000c)45000d)55000Correct answer is option 'C'. Can you explain this answer?
Question Description
If the original cost of a building is Rs. 25,00,000/- and its scrap value after 55 years is Rs.25,000/-,then its annual depreciation (in Rs.) using straight line method isa)25000b)35000c)45000d)55000Correct answer is option 'C'. Can you explain this answer? for GATE 2024 is part of GATE preparation. The Question and answers have been prepared according to the GATE exam syllabus. Information about If the original cost of a building is Rs. 25,00,000/- and its scrap value after 55 years is Rs.25,000/-,then its annual depreciation (in Rs.) using straight line method isa)25000b)35000c)45000d)55000Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for GATE 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If the original cost of a building is Rs. 25,00,000/- and its scrap value after 55 years is Rs.25,000/-,then its annual depreciation (in Rs.) using straight line method isa)25000b)35000c)45000d)55000Correct answer is option 'C'. Can you explain this answer?.
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