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bhargav (student)     27 May 2011

Depreciation doubt....

Hi friends..

I have a doubts please clarify it...

1) A company purchased a machinery on April01,2000 forRs.1,50,000.It is estimated that the machinery will have a useful life of 5 years after which it will have no salvage value.If the depreciation charged during the year 2004-2005 was....

a)Rs.50000   b)Rs.40000    c)30000   d)10000

2)An asset was purchased for Rs.1,00,000 on which depreciation was provided @ 15% on S.L.M.method,the W.D.V.of the asset at the end of two years is

a)70000          b)85000          c)15000    d)72250.

Reply with solutions please..............



 11 Replies


(Guest)

30000 for the yr 2004-2005 as per SLM

1 Like

(Guest)

72250 

1 Like
Akash

Akash (CA Final Article Assistant)     27 May 2011

1.Depreciation = (150000-0) / 5= 30000



2. after  1st yr  wdv value= (100-15)% * 100000=85000

  after 2nd year wdv value= 85% * 85000 = 72250

1 Like
bhargav

bhargav (student)     27 May 2011

Originally posted by : nisha

72250 

but the given answer is 70000

Akash

Akash (CA Final Article Assistant)     27 May 2011

Sorry answer to 2nd question is

Depreciation in each year is =15%* 100000=15000

WDV value after 2 yrs = 100000-2*15000=70000

mridul savio Pinto

mridul savio Pinto (articled trainee )     27 May 2011

as per slm the wdv at the end is 70000

CA ADITYA SHARMA

CA ADITYA SHARMA (CA IN PRACTICE )     27 May 2011

answer of 2nd question will be 70000 using s.l.m. method

1 Like
CA ADITYA SHARMA

CA ADITYA SHARMA (CA IN PRACTICE )     27 May 2011

and 1st question answer will be 20000 rupees

1 Like

(Guest)

agreewith future ca

Umesh Daga

Umesh Daga (Student)     28 May 2011

Solution for 1st question

Depri = 150000 - 0 / 5 =30000

So depri for each year will be Rs. 30000 / -

Solution for 2nd question

WDV value after two years will be Rs. 70000 / -

shakuntala  chhangani

shakuntala chhangani (FCA Course co-ordinator WIRC coaching centre)     31 May 2011

Hi friends, the answer to 1st question is Rs. 30,000 as per SLM method. the question has given only useful life and nothing else. so u can not apply sum of years' digit method.  and 

Dep. p.a as per SLM = Historical cost - Scrap Value

                                          Estimated useful life

                                    = 1,50,000 - NIL

                                             5

                                   = Rs. 30,000 p.a

under SLM, depreciation p.a remains the same so the answer is Rs. 30,000

Regards, CA Shakuntala Chhangani


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