for depreciation

This query is : Resolved

RAUSHAN KUMAR CHAUDHARY (Querist)
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26 September 2009 if WDV OF CAR ON 1.4.2008 IS RS.592500, DURING THE MONTHS NOV.2008, AFTER REPLACEMENT OF FIRST CAR HE PURCHASE A NEW CAR OF RS.640000 (REPLACEMENT VALUE OF FIRST CAR IS 225000 NOT INCLUDED IN RS.640000), THAN WHAT IS THE AMOUNT OF DEPRECIATION FOR THE FINANCIAL YEAR 2008-09 & WHAT WILL BE THE ACCOUNTING TREATMENT

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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27 September 2009 Assuming the rate of depreciation is 15%, total depreciation for the f.y 2008-09 is Rs. 1,03,125/- as per the following calculation.

WDV -- 5,92,500/-
Less: Replacement value -- 2,25,000/-
Balance -- 3,67,500/-
Depreciation @ 15% -- 55,125/- (A)
Value of new car -- 6,40,000/-
Depreciation @ 7.5%, being
purchased in nov 08 -- 48,000/- (B)
Total depreciation A+ B -- 1,03,125/-

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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27 September 2009 In case of an Individual or small assessees
you may credit the Car A/c by Sales Proceeds i.e. Rs 225000/ and Debit Car A/c by the amount of New Car by 640000/.
At the year end Debit Depreciation A/c by Rs
103125 by crediting Car A/c