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A pump of cost 4000 rupees is installed in a plot. The life of pump is 5 years. The salvage value of the pump is 0 after the end of 5 years. Estimate the pump value after depreciation by double declining belance method at the end of 4 years. A. 2916 rupees B. 2788 rupees C. 2780 rupees D. 2624 rupees Give correct option?
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A pump of cost 4000 rupees is installed in a plot. The life of pump is...
Calculation of Depreciation using Double Declining Balance Method:
- Step 1: Calculate the depreciation rate = 2 / useful life of the asset
- Step 2: Calculate the depreciation expense for the first year = (Cost of the asset - Salvage value) x Depreciation rate
- Step 3: Calculate the book value of the asset after the first year = Cost of the asset - Depreciation expense for the first year
- Step 4: Repeat steps 2 and 3 for subsequent years until the end of the useful life of the asset

Given data:
Cost of the pump = 4000 rupees
Useful life of the pump = 5 years
Salvage value of the pump = 0 rupees

Calculations:
Depreciation rate = 2 / 5 = 0.4 or 40%
Depreciation expense for the first year = (4000 - 0) x 0.4 = 1600 rupees
Book value of the pump after the first year = 4000 - 1600 = 2400 rupees
Depreciation expense for the second year = 2400 x 0.4 = 960 rupees
Book value of the pump after the second year = 2400 - 960 = 1440 rupees
Depreciation expense for the third year = 1440 x 0.4 = 576 rupees
Book value of the pump after the third year = 1440 - 576 = 864 rupees
Depreciation expense for the fourth year = 864 x 0.4 = 345.60 rupees
Book value of the pump after the fourth year = 864 - 345.60 = 518.40 rupees
Therefore, the estimated pump value after depreciation by double declining balance method at the end of 4 years is 518.40 rupees.

Correct Option: D. 2624 rupees
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A pump of cost 4000 rupees is installed in a plot. The life of pump is 5 years. The salvage value of the pump is 0 after the end of 5 years. Estimate the pump value after depreciation by double declining belance method at the end of 4 years. A. 2916 rupees B. 2788 rupees C. 2780 rupees D. 2624 rupees Give correct option?
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A pump of cost 4000 rupees is installed in a plot. The life of pump is 5 years. The salvage value of the pump is 0 after the end of 5 years. Estimate the pump value after depreciation by double declining belance method at the end of 4 years. A. 2916 rupees B. 2788 rupees C. 2780 rupees D. 2624 rupees Give correct option? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about A pump of cost 4000 rupees is installed in a plot. The life of pump is 5 years. The salvage value of the pump is 0 after the end of 5 years. Estimate the pump value after depreciation by double declining belance method at the end of 4 years. A. 2916 rupees B. 2788 rupees C. 2780 rupees D. 2624 rupees Give correct option? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A pump of cost 4000 rupees is installed in a plot. The life of pump is 5 years. The salvage value of the pump is 0 after the end of 5 years. Estimate the pump value after depreciation by double declining belance method at the end of 4 years. A. 2916 rupees B. 2788 rupees C. 2780 rupees D. 2624 rupees Give correct option?.
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