Question
Company X acquired equipment costing ₹5,00,000 on
1-Jan-Year1; useful life 5 years, no residual. It capitalises borrowing costs of ₹30,000 related to the purchase. Total capitalised cost = ? Depreciation in Year1 using straight line (full year) = ?Solution
Total Capitalised Cost = Purchase Cost + Capitalised Borrowing Costs = 5,00,000 + 30,000 = ₹5,30,000. Annual Depreciation = Capitalised Cost / Useful Life = 5,30,000 / 5 = ₹1,06,000.
Under AS 6, which of the following cannot be considered a method of depreciation?
The primary cause of depreciation is:
A machine was purchased for ₹1,00,000. Depreciation is charged at 10% per annum under the Diminishing Balance Method. The book value of the machine at...
Under which condition will no depreciation be charged on a fixed asset during a financial year?
A company acquired a machine for ₹12 lakhs with an expected useful life of 6 years and residual value of ₹1.2 lakh. Using the straight-line method, ...
Under the Written Down Value (WDV) method, depreciation is:
XYZ Ltd. uses Written Down Value (WDV) method for depreciation. It acquires a machine for ₹10 lakhs, has a salvage value of ₹1 lakh and charges 20% ...
Which depreciation method is most suitable for assets like mines, quarries, etc.?
A machine costing ₹4,00,000 has a useful life of 5 years with scrap value ₹25,000. The company provides depreciation on WDV at 25% p.a. After 3 year...
Which of the following is NOT a method of charging depreciation?
