depreciation accounting -doubt clarification

it is 19600..see..if it is rate..(100000-2000)*20%= 19600 for five years..

if in normal case..(100000-2000)/5yrs=19600 for five years..

in straight line method..depreciation will be equal full period of life..

it is 19600..see..if it is rate..(100000-2000)*20%= 19600 for five years..

if in normal case..(100000-2000)/5yrs=19600 for five years..

in straight line method..depreciation will be equal full period of life..

depreciation will be (original cost- scrap value)/ estimated life of asset under straight line method..

thus it is (100000-2000)/5yrs = 19600

19600 is the correct answer....
 

me too same but now am clear.....thanks all of you...

THANX A LOT FRIENDS

Hi Mridul, the answer to ur question is :

the amount of depreciation p.a = Historical cost - scrap value

                                                             estimated useful life

                                                        = 1,00,000 - 2,000

                                                                 5

                                                        = Rs. 19,600 per annum

rate of depreciation = Depreciation per annum  x 100

                                        historical cost

                                    = 19,600 x 100

                                          1,00,000

                                     = 19.6%

Regards, CA Shakuntala Chhangani

further keep in mind that rate of dep is always on original cost or wdv and never on depreciable amount. so it can never be (98,000 x 20%). it will be 1,00,000 x 19.6 % p.a which, after five years will leave a scrap value of 2,000.

Regards, CA Shakuntala Chhngani