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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 @ 10% p.a. under written down value method. Depreciation for the 4th year = ________.
  • a)
    25,000
  • b)
    13,000
  • c)
    10,530
  • d)
    9,477
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installat...
Here we should ignore both residual value and repair.
For the calculation of WDV rate, we consider residual value (asset value - residual). Here it's 10%, now we have to calculate depreciation in the fourth year.
(cost of repair won't consider in depreciation, but there are exceptions)

130000*10%=13000
1 year 130,000-13,000=117000
2 year 117000-11700=105300
3year 105300-10530=94770
4 year 94770-9477

Nb: For the calculation of SLM method, scrap value should be taken.

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Community Answer
Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installat...
Take 130000 as initial book walue instead of 125000 ( since its wdv) now go on depreciating w/o considering repairs( as it doesn't increase productivity and is hence not capital) 4th yr depri will automatically come to 9477
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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 @ 10% p.a. under written down value method. Depreciation for the 4th year = ________.a)25,000b)13,000c)10,530d)9,477Correct answer is option 'D'. Can you explain this answer?
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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 @ 10% p.a. under written down value method. Depreciation for the 4th year = ________.a)25,000b)13,000c)10,530d)9,477Correct answer is option 'D'. 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 @ 10% p.a. under written down value method. Depreciation for the 4th year = ________.a)25,000b)13,000c)10,530d)9,477Correct answer is option 'D'. 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 @ 10% p.a. under written down value method. Depreciation for the 4th year = ________.a)25,000b)13,000c)10,530d)9,477Correct answer is option 'D'. Can you explain this answer?.
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