A company purchased plant for ₹50,000. The useful life of the plant is 10 years and the residual value is ₹5,000. The management wants to depreciate it by straight line method. Rate of depreciation will be —
CS CSEET · Business Economics & Fundamentals of Accounting and Auditing · PYQS · June 2013
A company purchased plant for ₹50,000. The useful life of the plant is 10 years and the residual value is ₹5,000. The management wants to depreciate it by straight line method. Rate of depreciation will be —
Answer & Explanation:
Correct Answer: Option (B)
Correct answer: (B) 9%. Annual depreciation = (50,000−5,000)/10 = 4,500, or 9% of original cost.
Topics: Fundamentals of Accounting
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