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Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installation expenses were Rs 10,000. Residual value after 5 years Rs 5,000. On 01.07.2003, expenses for repairs were incurred to the extent of Rs 2,000. Depreciation is provided under straight line method.
Depreciation rate = 10%. Annual Depreciation = _____.
Depreciation rate = 10%. Annual Depreciation = _____.
- a)13,000
- b)17,000
- c)21,000
- d)25,000
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installat...
(Machine Cost + Installation Cost - residual value) / Life of machine
(120000+10000-5000) / 5 = 25000
Repair will not be included in the cost of machine.
This question is part of UPSC exam. View all CA Foundation courses
Most Upvoted Answer
Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installat...
Dep=rate ×cost
cost=120000+10000=130000
dep=10/100×130000=130000
cost=120000+10000=130000
dep=10/100×130000=130000
Community Answer
Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installat...
Given Information:
Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installation expenses were Rs 10,000. Residual value after 5 years Rs 5,000. On 01.07.2003, expenses for repairs were incurred to the extent of Rs 2,000. Depreciation is provided under straight line method. Depreciation rate = 10%.
To find:
Annual Depreciation
Solution:
Step 1: Calculate the cost of the machine
Cost of the machine = Purchase price + Installation expenses
Cost of the machine = Rs 1,20,000 + Rs 10,000 = Rs 1,30,000
Step 2: Calculate the depreciable amount
Depreciable amount = Cost of the machine - Residual value
Depreciable amount = Rs 1,30,000 - Rs 5,000 = Rs 1,25,000
Step 3: Calculate the annual depreciation
Annual depreciation = (Depreciable amount / Useful life)
Useful life = 5 years
Annual depreciation = (Rs 1,25,000 / 5) = Rs 25,000
Step 4: Adjust for repairs incurred during the year
Depreciation for the year = Annual depreciation - Repairs incurred during the year
Depreciation for the year = Rs 25,000 - Rs 2,000 = Rs 23,000
Therefore, the annual depreciation is Rs 23,000.
None of the given options match the correct answer. Hence, the correct answer is not available in the given options.
Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installation expenses were Rs 10,000. Residual value after 5 years Rs 5,000. On 01.07.2003, expenses for repairs were incurred to the extent of Rs 2,000. Depreciation is provided under straight line method. Depreciation rate = 10%.
To find:
Annual Depreciation
Solution:
Step 1: Calculate the cost of the machine
Cost of the machine = Purchase price + Installation expenses
Cost of the machine = Rs 1,20,000 + Rs 10,000 = Rs 1,30,000
Step 2: Calculate the depreciable amount
Depreciable amount = Cost of the machine - Residual value
Depreciable amount = Rs 1,30,000 - Rs 5,000 = Rs 1,25,000
Step 3: Calculate the annual depreciation
Annual depreciation = (Depreciable amount / Useful life)
Useful life = 5 years
Annual depreciation = (Rs 1,25,000 / 5) = Rs 25,000
Step 4: Adjust for repairs incurred during the year
Depreciation for the year = Annual depreciation - Repairs incurred during the year
Depreciation for the year = Rs 25,000 - Rs 2,000 = Rs 23,000
Therefore, the annual depreciation is Rs 23,000.
None of the given options match the correct answer. Hence, the correct answer is not available in the given options.
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Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installation expenses were Rs 10,000. Residual value after 5 years Rs 5,000. On 01.07.2003, expenses for repairs were incurred to the extent of Rs 2,000. Depreciation is provided under straight line method.Depreciation rate = 10%. Annual Depreciation = _____.a)13,000b)17,000c)21,000d)25,000Correct answer is option 'A'. Can you explain this answer?
Question Description
Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installation expenses were Rs 10,000. Residual value after 5 years Rs 5,000. On 01.07.2003, expenses for repairs were incurred to the extent of Rs 2,000. Depreciation is provided under straight line method.Depreciation rate = 10%. Annual Depreciation = _____.a)13,000b)17,000c)21,000d)25,000Correct answer is option 'A'. 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 Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installation expenses were Rs 10,000. Residual value after 5 years Rs 5,000. On 01.07.2003, expenses for repairs were incurred to the extent of Rs 2,000. Depreciation is provided under straight line method.Depreciation rate = 10%. Annual Depreciation = _____.a)13,000b)17,000c)21,000d)25,000Correct answer is option 'A'. 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 Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installation expenses were Rs 10,000. Residual value after 5 years Rs 5,000. On 01.07.2003, expenses for repairs were incurred to the extent of Rs 2,000. Depreciation is provided under straight line method.Depreciation rate = 10%. Annual Depreciation = _____.a)13,000b)17,000c)21,000d)25,000Correct answer is option 'A'. Can you explain this answer?.
Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installation expenses were Rs 10,000. Residual value after 5 years Rs 5,000. On 01.07.2003, expenses for repairs were incurred to the extent of Rs 2,000. Depreciation is provided under straight line method.Depreciation rate = 10%. Annual Depreciation = _____.a)13,000b)17,000c)21,000d)25,000Correct answer is option 'A'. 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 Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installation expenses were Rs 10,000. Residual value after 5 years Rs 5,000. On 01.07.2003, expenses for repairs were incurred to the extent of Rs 2,000. Depreciation is provided under straight line method.Depreciation rate = 10%. Annual Depreciation = _____.a)13,000b)17,000c)21,000d)25,000Correct answer is option 'A'. 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 Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installation expenses were Rs 10,000. Residual value after 5 years Rs 5,000. On 01.07.2003, expenses for repairs were incurred to the extent of Rs 2,000. Depreciation is provided under straight line method.Depreciation rate = 10%. Annual Depreciation = _____.a)13,000b)17,000c)21,000d)25,000Correct answer is option 'A'. Can you explain this answer?.
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