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. 13,000
c. 21,000
d. 25,000
please provide me some solution over this i am confused about this correct answer its whether 13000 or 25000
| Originally posted by :kumar shan | ||
| " | 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. 13,000 c. 21,000 b. 17,000 d. 25,000 please provide me some solution over this i am confused about this correct answer its whether 13000 or 25000 |
" |
is the answer 25k?
d
d 25000
yeah.the answer is 25000 ..
(Machine Cost + Installation Cost - residual value) / Life of machine
(120000+10000-5000) / 5 = 25000
Repair will not be included in the cost of machine.
Repairs expense incurred after once installation comleted is not eligible for depreciation. Hence Annual Dep. will be 25000/- i.e. 120000+10000-5000=125000/5 years= 25000.
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