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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
- a)Rs.6,000
- b)Rs. 12,000
- c)Rs. 18,000
- d)Rs. 24,000
Correct answer is '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...
Depreciation is the allocation of the cost of an asset over its useful life. There are several methods to calculate depreciation, one of which is the sum of years digits method.
The sum of years digits method is an accelerated depreciation method, which means that a higher amount of depreciation is allocated in the earlier years of an asset's useful life. This method takes into account the total number of years of useful life and assigns a weightage to each year, with the highest weightage given to the first year and the lowest weightage given to the last year.
In this case, the original cost of the asset is Rs.1,26,000 and the useful life is 6 years. To calculate the depreciation for the fourth year, we need to determine the sum of years digits.
The sum of years digits is calculated using the formula:
n(n+1)/2
Where n is the useful life of the asset. In this case, n = 6. Therefore,
Sum of years digits = 6(6+1)/2 = 21
Now, we can calculate the weightage for the fourth year:
Weightage for the fourth year = Remaining years of useful life / Sum of years digits
= (6-4+1) / 21
= 3/21
= 1/7
To calculate the depreciation for the fourth year, we multiply the weightage for the fourth year by the original cost of the asset:
Depreciation for the fourth year = Weightage for the fourth year * Original cost
= (1/7) * Rs.1,26,000
= Rs.18,000
Hence, the depreciation for the fourth year under the sum of years digits method will be Rs.18,000 (Option C).
The sum of years digits method is an accelerated depreciation method, which means that a higher amount of depreciation is allocated in the earlier years of an asset's useful life. This method takes into account the total number of years of useful life and assigns a weightage to each year, with the highest weightage given to the first year and the lowest weightage given to the last year.
In this case, the original cost of the asset is Rs.1,26,000 and the useful life is 6 years. To calculate the depreciation for the fourth year, we need to determine the sum of years digits.
The sum of years digits is calculated using the formula:
n(n+1)/2
Where n is the useful life of the asset. In this case, n = 6. Therefore,
Sum of years digits = 6(6+1)/2 = 21
Now, we can calculate the weightage for the fourth year:
Weightage for the fourth year = Remaining years of useful life / Sum of years digits
= (6-4+1) / 21
= 3/21
= 1/7
To calculate the depreciation for the fourth year, we multiply the weightage for the fourth year by the original cost of the asset:
Depreciation for the fourth year = Weightage for the fourth year * Original cost
= (1/7) * Rs.1,26,000
= Rs.18,000
Hence, the depreciation for the fourth year under the sum of years digits method will be Rs.18,000 (Option C).
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Community Answer
Original cost = Rs.1,26,000; Salvage value = Nil; Useful life = 6 year...
=( 126000)× 3/21
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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 bea)Rs.6,000b)Rs. 12,000c)Rs. 18,000d)Rs. 24,000Correct answer is '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 fourth year under sum of years digits method will bea)Rs.6,000b)Rs. 12,000c)Rs. 18,000d)Rs. 24,000Correct answer is '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 fourth year under sum of years digits method will bea)Rs.6,000b)Rs. 12,000c)Rs. 18,000d)Rs. 24,000Correct answer is '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 fourth year under sum of years digits method will bea)Rs.6,000b)Rs. 12,000c)Rs. 18,000d)Rs. 24,000Correct answer is 'C'. Can you explain this answer?.
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 bea)Rs.6,000b)Rs. 12,000c)Rs. 18,000d)Rs. 24,000Correct answer is '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 fourth year under sum of years digits method will bea)Rs.6,000b)Rs. 12,000c)Rs. 18,000d)Rs. 24,000Correct answer is '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 fourth year under sum of years digits method will bea)Rs.6,000b)Rs. 12,000c)Rs. 18,000d)Rs. 24,000Correct answer is '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 fourth year under sum of years digits method will bea)Rs.6,000b)Rs. 12,000c)Rs. 18,000d)Rs. 24,000Correct answer is 'C'. Can you explain this answer?, a detailed solution for 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 bea)Rs.6,000b)Rs. 12,000c)Rs. 18,000d)Rs. 24,000Correct answer is 'C'. Can you explain this answer? has been provided alongside types of 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 bea)Rs.6,000b)Rs. 12,000c)Rs. 18,000d)Rs. 24,000Correct answer is 'C'. Can you explain this answer? theory, EduRev gives you an
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