Question No 05 Chapter No 13
Calculation of Rate of Depreciation in the Straight Line Method
5. A company purchased a plant for Rs 4,00,000. the useful life of the plant is 10 years and the estimated scrap value id Rs 4,000. determine the rate of depreciation when the management wants to Depreciate it by the straight-line method.
The solution of Question No 05 Chapter No 13:-
The method of calculating the Deprecation rate:
| Amount of Depreciation = | Cost of assets- Estimated Realizable or Scrap value |
| Number of years of expected useful life |
Rate of Deprecation can be calculated with the help of following formula:
Cost of assets = Cost of Plant = 4,00,000
Number of years of expected useful life = 10 years
Estimated Retaliated or Scrap value = 40,000
| Amount of Depreciation = | 4,00,000 – 40,000 | = 36,000 |
| 10 |
Rate of Depreciation = 36,000 / 4,00,000 X 100 = 9%
Depreciation | Meaning | Methods | Examples
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Also, Check out the solved question of all Chapters: –
Chapter No. 2 – Theory Base of Accounting
Chapter No. 3 – Vouchers and transactions
Chapter No. 4 – Journal
Chapter No. 5 – Ledger
Chapter No. 6 – Cash Book
Chapter No. 7 – Other Subsidiary Books
Chapter No. 8 – Journal Proper
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Chapter No. 9 – Trial Balance
Chapter No. 10 – Bank Reconciliation Statement
Chapter No. 11 – Depreciation
Chapter No. 12 – Provisions and Reserves
Chapter No. 13 – Bills of Exchange
Chapter No. 14 – Rectification of Errors
Chapter No. 15 – Financial Statements – (Without Adjustments)
Chapter No. 16 – Financial Statements – (With Adjustments)