An asset has a useful life of 4 years if it is depreciated by diminishing balance method. Its book value at the end of 4 years is 24% of its original cost. hence the rate of depreciation applied is
A. 20%
B. 30%
C. 25%
D. 35%
answer is 30% but pls show how it comes
Dear Sanjeev
Take original cost of assest is Rs. 100
Now 1st year dep on 100 @ 30% will be 30 and net wdv will be (100-30)=Rs. 70
in 2nd year dep charged on 70 @ 30% will be 21 & net wdv (70-21) = Rs. 49
in 3rd year dep charged on 49 @ 30% will be 14.7 & net wdv (49-14.7) = Rs. 34.30
in 4 th year dep charged on 34.3 @ 30% will be 10.3 & net wdv (34.3-10.3) = Rs. 24
anthor method
Take calculator & start with 100
Then press (-) 30% get 70, next (-) 30% get 49, next (-) 30% get 34.3, next (-) 30% get 24
thats's ok but what if there's no options how do i decide it would be 30%
Dear Sanjeev, Formula for calculation rate of depn under declining balance method. rate = 1 - ((salvage / cost) ^ (1 / life)).
Assuming Original Cost be 1
Applying above using figure given:- = (1-((0.24*1/1)^(1/4)))
= 0.300073
in term of % = 30% i.e., Ans. :-)
guys pls solve this querry
Ram of Raipur sends out goods costing 100000 to amar of alwar.3/5th of the goods were sold by consignee for rs 70000, commission 2% on sales plus 20% of gross sale less all commission exceeds cost price. the amount of commission will be ????
what would be the amount of sales when opening stock is 20000, purchase 50000 wages 10000. closing stock is 20000 and gross profit is 1/7th of sales.
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