Fundamental accounting

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 November 2011 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.)

Vikas

Vikas (Expert)
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05 November 2011 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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