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Original cost = Rs.1,26,000; Salvage value = Nil; Useful life = 6 years. Depreciation for the first year under sum of years digits method will be
- a)Rs.6,000
- b)Rs. 12,000
- c)Rs. 36,000
- d)Rs. 24,000
Correct answer is option 'C'. Can you explain this answer?
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Verified Answer
Original cost = Rs.1,26,000; Salvage value = Nil; Useful life = 6 year...
Option C is correct.
Sum of years = 1+2+3+4+5+6 = 21
Original Cost = 1,26,000
Sum of years = 1+2+3+4+5+6 = 21
Original Cost = 1,26,000
Depreciation = 1,26,000*3/21
= 18,000.
= 18,000.
Most Upvoted Answer
Original cost = Rs.1,26,000; Salvage value = Nil; Useful life = 6 year...
Given data:
Original cost = Rs.1,26,000
Salvage value = Nil
Useful life = 6 years
Depreciation for the fourth year under sum of years digits method will be calculated as follows:
Step 1: Calculate the total number of years of useful life of the asset.
Total useful life = 6 years
Step 2: Calculate the sum of the digits of the useful life.
Sum of the digits = 1+2+3+4+5+6 = 21
Step 3: Calculate the depreciation rate for each year using the sum of the years digits method.
Depreciation rate for year 1 = (6/21) x 100% = 28.57%
Depreciation rate for year 2 = (5/21) x 100% = 23.81%
Depreciation rate for year 3 = (4/21) x 100% = 19.05%
Depreciation rate for year 4 = (3/21) x 100% = 14.29%
Depreciation rate for year 5 = (2/21) x 100% = 9.52%
Depreciation rate for year 6 = (1/21) x 100% = 4.76%
Step 4: Calculate the depreciation expense for the fourth year.
Depreciation expense for year 4 = Depreciation rate for year 4 x (Original cost - Accumulated depreciation up to year 3)
Accumulated depreciation up to year 3 = Depreciation rate for year 1 x Original cost + Depreciation rate for year 2 x Original cost + Depreciation rate for year 3 x Original cost
Accumulated depreciation up to year 3 = 0.2857 x 126000 + 0.2381 x 126000 + 0.1905 x 126000
Accumulated depreciation up to year 3 = Rs.82371
Depreciation expense for year 4 = 0.1429 x (126000 - 82371) = Rs. 18000
Therefore, the depreciation for the fourth year under sum of years digits method is Rs. 18,000 (option C).
Original cost = Rs.1,26,000
Salvage value = Nil
Useful life = 6 years
Depreciation for the fourth year under sum of years digits method will be calculated as follows:
Step 1: Calculate the total number of years of useful life of the asset.
Total useful life = 6 years
Step 2: Calculate the sum of the digits of the useful life.
Sum of the digits = 1+2+3+4+5+6 = 21
Step 3: Calculate the depreciation rate for each year using the sum of the years digits method.
Depreciation rate for year 1 = (6/21) x 100% = 28.57%
Depreciation rate for year 2 = (5/21) x 100% = 23.81%
Depreciation rate for year 3 = (4/21) x 100% = 19.05%
Depreciation rate for year 4 = (3/21) x 100% = 14.29%
Depreciation rate for year 5 = (2/21) x 100% = 9.52%
Depreciation rate for year 6 = (1/21) x 100% = 4.76%
Step 4: Calculate the depreciation expense for the fourth year.
Depreciation expense for year 4 = Depreciation rate for year 4 x (Original cost - Accumulated depreciation up to year 3)
Accumulated depreciation up to year 3 = Depreciation rate for year 1 x Original cost + Depreciation rate for year 2 x Original cost + Depreciation rate for year 3 x Original cost
Accumulated depreciation up to year 3 = 0.2857 x 126000 + 0.2381 x 126000 + 0.1905 x 126000
Accumulated depreciation up to year 3 = Rs.82371
Depreciation expense for year 4 = 0.1429 x (126000 - 82371) = Rs. 18000
Therefore, the depreciation for the fourth year under sum of years digits method is Rs. 18,000 (option C).
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Community Answer
Original cost = Rs.1,26,000; Salvage value = Nil; Useful life = 6 year...
Under sum of year digit method you have to add the no of years given. That will come up to 21. Depreciation for the fourth year is asked. So count backwards from 6 till 4th year you will get 3. Now acc to the formula : Cost - scrap /estimated life. 126000 -0 ×3÷21=18000
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Original cost = Rs.1,26,000; Salvage value = Nil; Useful life = 6 years. Depreciation for the first year under sum of years digits method will bea)Rs.6,000b)Rs. 12,000c)Rs. 36,000d)Rs. 24,000Correct answer is option 'C'. Can you explain this answer?
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Original cost = Rs.1,26,000; Salvage value = Nil; Useful life = 6 years. Depreciation for the first year under sum of years digits method will bea)Rs.6,000b)Rs. 12,000c)Rs. 36,000d)Rs. 24,000Correct answer is option 'C'. Can you explain this answer? 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 Original cost = Rs.1,26,000; Salvage value = Nil; Useful life = 6 years. Depreciation for the first year under sum of years digits method will bea)Rs.6,000b)Rs. 12,000c)Rs. 36,000d)Rs. 24,000Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Original cost = Rs.1,26,000; Salvage value = Nil; Useful life = 6 years. Depreciation for the first year under sum of years digits method will bea)Rs.6,000b)Rs. 12,000c)Rs. 36,000d)Rs. 24,000Correct answer is option 'C'. Can you explain this answer?.
Original cost = Rs.1,26,000; Salvage value = Nil; Useful life = 6 years. Depreciation for the first year under sum of years digits method will bea)Rs.6,000b)Rs. 12,000c)Rs. 36,000d)Rs. 24,000Correct answer is option 'C'. Can you explain this answer? 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 Original cost = Rs.1,26,000; Salvage value = Nil; Useful life = 6 years. Depreciation for the first year under sum of years digits method will bea)Rs.6,000b)Rs. 12,000c)Rs. 36,000d)Rs. 24,000Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Original cost = Rs.1,26,000; Salvage value = Nil; Useful life = 6 years. Depreciation for the first year under sum of years digits method will bea)Rs.6,000b)Rs. 12,000c)Rs. 36,000d)Rs. 24,000Correct answer is option 'C'. Can you explain this answer?.
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