Harshil Limited purchased a machine on 1-4-2018 for ₹ 1,90,000. Inst

1.	Harshil Limited purchased a machine on 1-4-2018 for ₹ 1,90,000. Installation expenses amounted to ₹ 15,000 and carriage was ₹ 5,000. The estimated useful life of the machine is 10 years, while its scrap value is estimated to be ₹ 40,000. Calculate the amount of depreciation as per the straight-line method.
Answer» Annual depreciation: D = \(\frac{C−S}{N}\) Where, D = Amount of annual depreciation =? C = Cost price = purchase price + Installation expenses + Carriage charges = ₹ 1,90,000 + ₹ 15,000 + ₹ 5,000 = ₹ 2,10,000 S = Scrap value = ₹ 40,000 N = Total life in a years = 10 years D = \(\frac{2,10,000−40,000}{10}=\frac{1,70,000}{10}\) = ₹ 17,000 ∴ The amount of annual deprectatlon is ₹ 17,000.

Harshil Limited purchased a machine on 1-4-2018 for ₹ 1,90,000. Installation expenses amounted to ₹ 15,000 and carriage was ₹ 5,000. The estimated useful life of the machine is 10 years, while its scrap value is estimated to be ₹ 40,000. Calculate the amount of depreciation as per the straight-line method.

Answer»

Annual depreciation:

D = \(\frac{C−S}{N}\)

Where,

D = Amount of annual depreciation =?

C = Cost price = purchase price + Installation expenses + Carriage charges

= ₹ 1,90,000 + ₹ 15,000 + ₹ 5,000 = ₹ 2,10,000

S = Scrap value = ₹ 40,000

N = Total life in a years = 10 years

D = \(\frac{2,10,000−40,000}{10}=\frac{1,70,000}{10}\) = ₹ 17,000

∴ The amount of annual deprectatlon is ₹ 17,000.