Dinesh Garments purchased a machine for ₹50,000 and spent ₹6,000 on its erection. On the date of purchase it was estimated that the effective life of the machine will be ten years and after ten years its scrap value will
CS CSEET · Business Economics & Fundamentals of Accounting and Auditing · PYQS · December 2013
Dinesh Garments purchased a machine for ₹50,000 and spent ₹6,000 on its erection. On the date of purchase it was estimated that the effective life of the machine will be ten years and after ten years its scrap value will be ₹6,000. The amount of depreciation for each year on straight line basis is —
Answer & Explanation:
Correct Answer: Option (A)
Correct answer: (A) ₹5,000. Annual straight-line depreciation = (50,000 + 6,000 − 6,000)/10 = 5,000.
Topics: Fundamentals of Accounting and Auditing
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