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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.
Annual Depreciation = _____.
Annual Depreciation = _____.
- a)13,000
- b)17,000
- c)21,000
- d)25,000
Correct answer is option 'D'. Can you explain this answer?
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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.
Most Upvoted Answer
Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installat...
Calculation of Annual Depreciation:
1. Cost of Machine = Rs 1,20,000
2. Installation Expenses = Rs 10,000
3. Total Cost of Machine = Rs 1,30,000
4. Residual Value after 5 years = Rs 5,000
5. Depreciable amount = Rs 1,30,000 - Rs 5,000 = Rs 1,25,000
6. Depreciation per year = Depreciable amount / Useful life
- Useful life = 5 years
- Depreciation per year = Rs 1,25,000 / 5 = Rs 25,000
Adjustment for Repairs:
1. Repairs Expenses = Rs 2,000
2. Date of repairs = 01.07.2003
3. Depreciation for the year = Depreciation per year x (Number of months machine was used/12)
- Number of months machine was used = 7 months (from 01.01.2003 to 31.07.2003)
- Depreciation for the year = Rs 25,000 x (7/12) = Rs 14,583.33
4. Adjusted Annual Depreciation = Depreciation for the year - Repairs Expenses
- Adjusted Annual Depreciation = Rs 14,583.33 - Rs 2,000 = Rs 12,583.33 (approx.)
5. Final Annual Depreciation = Rs 25,000 (since it is higher than the adjusted annual depreciation)
Therefore, the Annual Depreciation is Rs 25,000 (option D).
1. Cost of Machine = Rs 1,20,000
2. Installation Expenses = Rs 10,000
3. Total Cost of Machine = Rs 1,30,000
4. Residual Value after 5 years = Rs 5,000
5. Depreciable amount = Rs 1,30,000 - Rs 5,000 = Rs 1,25,000
6. Depreciation per year = Depreciable amount / Useful life
- Useful life = 5 years
- Depreciation per year = Rs 1,25,000 / 5 = Rs 25,000
Adjustment for Repairs:
1. Repairs Expenses = Rs 2,000
2. Date of repairs = 01.07.2003
3. Depreciation for the year = Depreciation per year x (Number of months machine was used/12)
- Number of months machine was used = 7 months (from 01.01.2003 to 31.07.2003)
- Depreciation for the year = Rs 25,000 x (7/12) = Rs 14,583.33
4. Adjusted Annual Depreciation = Depreciation for the year - Repairs Expenses
- Adjusted Annual Depreciation = Rs 14,583.33 - Rs 2,000 = Rs 12,583.33 (approx.)
5. Final Annual Depreciation = Rs 25,000 (since it is higher than the adjusted annual depreciation)
Therefore, the Annual Depreciation is Rs 25,000 (option D).
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Community Answer
Amit Ltd. purchased a machine on 01.01.2003 for Rs 1,20,000. Installat...
2000 repaire charge not consider because it will repaire after start use
then ,consider use full life 5 years
then dep=(cost-s.v )/useful life
cost=12oooo+10000=130000
dep=( 130000-5000)/5=25000
then ,consider use full life 5 years
then dep=(cost-s.v )/useful life
cost=12oooo+10000=130000
dep=( 130000-5000)/5=25000
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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.Annual Depreciation = _____.a)13,000b)17,000c)21,000d)25,000Correct 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 under straight line method.Annual Depreciation = _____.a)13,000b)17,000c)21,000d)25,000Correct 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 under straight line method.Annual Depreciation = _____.a)13,000b)17,000c)21,000d)25,000Correct 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 under straight line method.Annual Depreciation = _____.a)13,000b)17,000c)21,000d)25,000Correct answer is option 'D'. 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.Annual Depreciation = _____.a)13,000b)17,000c)21,000d)25,000Correct 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 under straight line method.Annual Depreciation = _____.a)13,000b)17,000c)21,000d)25,000Correct 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 under straight line method.Annual Depreciation = _____.a)13,000b)17,000c)21,000d)25,000Correct answer is option 'D'. Can you explain this answer?.
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