Additional Questions on Depreciation Video Lecture | SSC CGL Tier 2 - Study Material, Online Tests, Previous Year

a trader followed wdv method of
depreciation the book value of a set of
the four years is twenty four percent of
original cost find the rate of
depreciation a 24 percent B 26 percent C
32 percent and deal 30 percent written
down value method of depreciation
after four years is twenty four percent
of the original cost we could make use
of a formula which says that the future
value is equal to present value into one
minus rate I to the power n this is the
future value present value 1 minus I
being the rate rate of interest rate of
depreciation and being the number of
years now let us assume let us just
consider that the present value of a
particular asset is rupees 100 so we
want to find out what is the future
value or rather we know that the future
value is 24 percent of the original cost
so if the present value is hundred the
future value is 24 1 minus rate is what
I have to find out I do not know the
rate hold to the power this is after
four years this is one way of solving
this particular problem now in such a
case what do we get 24 divided by 100
zero point two four is equal to one
minus five whole to the power four
therefore fourth root of 0.1 t 4 is
equal to one minus AI 0.24 so we take
point two four and do square root and
square which gives us zero point six
nine nine nine or zero point seven zero
is equal to one minus I or I
equal to 0.3 0 for 30% therefore the
rate of depreciation should be that be
percent alternatively we could try all
these alternatives and check at what
value if if the present value is 100
if the appreciation rate is 24 would we
get 24 of the original cost after 4
years
the correct answer here would be d 30%
loss on sale of machinery is credited to
a machinery account B purchase account C
profit and loss account the none loss on
sale of machinery
correct answer is a machinery account
just to take an example if we have
10,000 rupees machinery it's sold at
8,000 the entry is bank account debit we
get only 8,000 loss on machinery account
is debited for 2,000 and what is
credited machinery account is credited
with both the amount receive and the
loss so loss on sale of machinery
account is credited to machinery account
cost of acquisition which is yet to be
allocated is a accumulated cost be
written down when you see net realizable
value and D none
correct answer written down value is the
cost of acquisition which is yet to be
accumulated correct answer be a machine
purchased for - like 50000 on 1 1 2010
can produce 30,000 units during its
useful life it's estimated scrap value
is 10000 the pattern of production of
the next field for years is 6000 250
units 2002 truth 2000 275 units and
12,000 units and 2013 is 3 4 5 2 units
the return
all value of the machine after the third
year will be you want to find out the
written down value of the machine so
what is the depreciation per unit tool
at fifty thousand - craft value of ten
thousand that's - like - like forty
thousand divided by thirty thousand
units therefore this gives us eighty per
unit into like 40 by 30 eighty per unit
is the rate of depreciation so after the
third year six thousand two hundred and
fifty units two thousand two hundred and
seventy five units and twelve thousand
units six two five zero plus two - 75
plus twelve thousand 20 thousand five
twenty five into 80 is the amount of
depreciation that has been charged this
should be eight per unit not eating
therefore it becomes one leg 64 200 1
lakh 64 200 written down value this -
left 50 thousand - one year 64 200 equal
to 85 eight hundred correct answer
should be a eighty-five thousand eight
hundred correct answer 85 eight hundred
please know this was eight per unit and
not 80 the assets which were earlier
revalued upward and now revalue downward
to the extent of earlier upward
revaluation amount should be a credited
to revaluation reserve
debited to revaluation reserve see
credited to profit and loss account and
be debited to profit and loss account
earlier till valued upward so
devaluation reserve was created as it
account debited revaluation reserve was
created nalli revalued downward and to
that extent the amount of revaluation
will be reduced therefore debited to
revaluation reserve correct answer
option B misses dargah and company
installed a missionary on one one 2007
at a cost of five black useful life of
the machine is estimated at ten years
the appreciation is charged under
straight-line method in December 2013
they found that the machine became
obsolete and could not be used it was
sold for fifty thousand there will be
what are the options a capital loss of
one lakh fifty revenue loss of one lakh
capital loss of one lakh or a revenue
loss of one lakh fifty thousand cost of
the missionary five lakh useful life ten
years say for depreciation per year
fifty thousand how many years are we
talking about charged under the
straight-line method in December 2013
this was one one two thousand seven so
seven eight nine ten eleven twelve and
thirteen is seven years we are talking
of three lakh 50,000 depreciation they
found that the machine could not be used
obsolete and think after three lakh
fifty thousand 1 lakh fifty thousand is
the book value written down value and it
was sold for fifty thousand therefore
one lakh is the loss this is a capital
loss of one lakh correct answer
should we see capital loss of rupees one
lakh the cost of an asset is rupees one
lakh twenty thousand the scrap value
will be 25 percent at the end of ten
years
if straight-line method of depreciation
is followed the rate of depletion
is a 10% be 9% see 8.5%
and D 7.5%
so the cost of the asset is one like
twenty thousand written down value after
10 years is 25 percent of one lakh
twenty thousand that is thirty thousand
is the written down value that means the
amount of depreciation over the ten
years has been ninety thousand nine
thousand is the amount of depreciation
every year nine thousand divided by one
lakh twenty thousand in two hundred is
my rate of depreciation which is equal
to seven point five percent correct
answer D seven point five percent the
amount of depreciation charged under the
annuity method eight remains a remains
fixed for all the years B decreases
every year C increases every year D is
recalculated every year under annuity
method it remains fixed and will amount
is the same fixed annuity but remains
fixed for all the years under the
annuity method