CA Foundation Exam > CA Foundation Questions > The useful life of a machine is estimated to ...
Start Learning for Free
The useful life of a machine is estimated to be 10 years and course Rs.10,000 rate of depreciation is 10% per annum. The scrap value at the end of its life is?
Most Upvoted Answer
The useful life of a machine is estimated to be 10 years and course Rs...
Useful Life of a Machine and Depreciation Rate
Depreciation is the reduction in the value of a tangible asset due to wear and tear, obsolescence, or any other factor. It is an accounting method that allocates the cost of an asset over its useful life. In this case, we are given that:
- The useful life of the machine is 10 years
- The cost of the machine is Rs.10,000
- The rate of depreciation is 10% per annum
Calculating Depreciation
To calculate the depreciation of the machine, we can use the straight-line method. This method assumes that the asset loses an equal amount of value each year over its useful life. The formula for straight-line depreciation is:
Annual Depreciation = (Cost of Asset - Salvage Value) / Useful Life
Where:
- Cost of Asset: The original cost of the machine (Rs.10,000)
- Salvage Value: The value of the machine at the end of its useful life (also known as the scrap value)
- Useful Life: The estimated useful life of the machine (10 years)
Using the formula, we can calculate the annual depreciation of the machine:
Annual Depreciation = (Rs.10,000 - Salvage Value) / 10
Since the rate of depreciation is 10% per annum, we can also calculate the annual depreciation as:
Annual Depreciation = Cost of Asset x Depreciation Rate
Using this formula, we can calculate the annual depreciation as:
Annual Depreciation = Rs.10,000 x 10% = Rs.1,000
Calculating Scrap Value
The scrap value is the value of the machine at the end of its useful life. In this case, we are given that the scrap value is:
Scrap Value = Rs.10,000 x 10% x 10 years = Rs.10,000 - Rs.10,000 x 10% x 10 years = Rs.0
From this calculation, we can see that the scrap value of the machine is zero. This means that the machine will have no residual value at the end of its useful life and will be completely depreciated.
Conclusion
In conclusion, the useful life of a machine is estimated to be 10 years and the rate of depreciation is 10% per annum. Using the straight-line method, we can calculate the annual depreciation of the machine as Rs.1,000. The scrap value of the machine is zero, which means that the machine will have no residual value at the end of its useful life and will be completely depreciated.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
The useful life of a machine is estimated to be 10 years and course Rs.10,000 rate of depreciation is 10% per annum. The scrap value at the end of its life is?
Question Description
The useful life of a machine is estimated to be 10 years and course Rs.10,000 rate of depreciation is 10% per annum. The scrap value at the end of its life is? 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 useful life of a machine is estimated to be 10 years and course Rs.10,000 rate of depreciation is 10% per annum. The scrap value at the end of its life is? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The useful life of a machine is estimated to be 10 years and course Rs.10,000 rate of depreciation is 10% per annum. The scrap value at the end of its life is?.
The useful life of a machine is estimated to be 10 years and course Rs.10,000 rate of depreciation is 10% per annum. The scrap value at the end of its life is? 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 useful life of a machine is estimated to be 10 years and course Rs.10,000 rate of depreciation is 10% per annum. The scrap value at the end of its life is? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The useful life of a machine is estimated to be 10 years and course Rs.10,000 rate of depreciation is 10% per annum. The scrap value at the end of its life is?.
Solutions for The useful life of a machine is estimated to be 10 years and course Rs.10,000 rate of depreciation is 10% per annum. The scrap value at the end of its life is? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of The useful life of a machine is estimated to be 10 years and course Rs.10,000 rate of depreciation is 10% per annum. The scrap value at the end of its life is? defined & explained in the simplest way possible. Besides giving the explanation of
The useful life of a machine is estimated to be 10 years and course Rs.10,000 rate of depreciation is 10% per annum. The scrap value at the end of its life is?, a detailed solution for The useful life of a machine is estimated to be 10 years and course Rs.10,000 rate of depreciation is 10% per annum. The scrap value at the end of its life is? has been provided alongside types of The useful life of a machine is estimated to be 10 years and course Rs.10,000 rate of depreciation is 10% per annum. The scrap value at the end of its life is? theory, EduRev gives you an
ample number of questions to practice The useful life of a machine is estimated to be 10 years and course Rs.10,000 rate of depreciation is 10% per annum. The scrap value at the end of its life is? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup