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16. A company developed a technology to enhance the battery life of mobile phones. The cost of development have been capitalized as an intangible asset at 5,00,000. The company estimates the life of the technology developed to be 3 years. The company has forecasted that 50% of sales will be in year 1, 35% in year 2 and 15% in year 3. Wha should be the amortisation charge in third year?
(a) ₹2,50,000
(b) 75,000
(c) 1,75,000?
Most Upvoted Answer
16. A company developed a technology to enhance the battery life of mo...
Amortisation Calculation:

Step 1: Calculate Annual Amortisation Expense
- Annual Amortisation Expense = Cost of Development / Estimated Life of Technology
- Annual Amortisation Expense = 5,00,000 / 3
- Annual Amortisation Expense = ₹1,66,667

Step 2: Calculate Amortisation Charge in Year 3
- Sales in Year 3 = 15% of Total Sales
- Amortisation Charge in Year 3 = Annual Amortisation Expense * Sales in Year 3
- Amortisation Charge in Year 3 = 1,66,667 * 15%
- Amortisation Charge in Year 3 = ₹25,000
Therefore, the amortisation charge in the third year would be ₹25,000.
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16. A company developed a technology to enhance the battery life of mobile phones. The cost of development have been capitalized as an intangible asset at 5,00,000. The company estimates the life of the technology developed to be 3 years. The company has forecasted that 50% of sales will be in year 1, 35% in year 2 and 15% in year 3. Wha should be the amortisation charge in third year?(a) ₹2,50,000(b) 75,000(c) 1,75,000?
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16. A company developed a technology to enhance the battery life of mobile phones. The cost of development have been capitalized as an intangible asset at 5,00,000. The company estimates the life of the technology developed to be 3 years. The company has forecasted that 50% of sales will be in year 1, 35% in year 2 and 15% in year 3. Wha should be the amortisation charge in third year?(a) ₹2,50,000(b) 75,000(c) 1,75,000? 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 16. A company developed a technology to enhance the battery life of mobile phones. The cost of development have been capitalized as an intangible asset at 5,00,000. The company estimates the life of the technology developed to be 3 years. The company has forecasted that 50% of sales will be in year 1, 35% in year 2 and 15% in year 3. Wha should be the amortisation charge in third year?(a) ₹2,50,000(b) 75,000(c) 1,75,000? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 16. A company developed a technology to enhance the battery life of mobile phones. The cost of development have been capitalized as an intangible asset at 5,00,000. The company estimates the life of the technology developed to be 3 years. The company has forecasted that 50% of sales will be in year 1, 35% in year 2 and 15% in year 3. Wha should be the amortisation charge in third year?(a) ₹2,50,000(b) 75,000(c) 1,75,000?.
Solutions for 16. A company developed a technology to enhance the battery life of mobile phones. The cost of development have been capitalized as an intangible asset at 5,00,000. The company estimates the life of the technology developed to be 3 years. The company has forecasted that 50% of sales will be in year 1, 35% in year 2 and 15% in year 3. Wha should be the amortisation charge in third year?(a) ₹2,50,000(b) 75,000(c) 1,75,000? 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.
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