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Fundamental accounting

This query is : Resolved 

Querist : Anonymous


Querist : Anonymous (Querist)
On 1.1.2005, a machine costing Rs.10,000 and a piece of furniture costing Rs.20,000 was purchased. Depreciation is provided at the rate of 5 percent on furniture and 10 percent per annum on machine. The depreciation for the year ended 31st March, 2005 should be:

(a) Rs. 1000
(b) Rs. 300
(c) Rs. 1250
(d) Rs. None of the three.

(PLEASE EXPLAIN THE METHOD IN DETAIL.)

Ans is (a) Rs. 1000

As assets are used for less than 180 days depreciation will be for half year.

Machine-10000*10/100*1/2= Rs.500

Furniture-20000*5/100*1/2= Rs.500

So total depreciation will be Rs.1000



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