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Calculate Depreciation Sample Assignment

Q. A firm acquired an asset on 1 January 20x01 at a cost of Rs.30,000. The asset has 10 year life at the end of which it is expected to realize Rs. 2,000. What would be the depreciation of the first three years: (a) on a straight line basis? (b) on a diminishing balance basis?

Solution:

                                                                                                            Rs.
Original Cost                                                                                  30,000
Less: Expected salvage value at the end of 10 years                 2,00
                                                                                                            28,000

Depreciable cost over 10 years
(a)    Straight Line Method                                              28,000       = Rs. 2,800
Depreciation expense per year                                       10                           
Thus depreciation of three years:                        2,800 X 3 =Rs. 8,400
( b) Diminishing Balance Method
Let us first calculate the rate of depreciation :


            
  = 1-0.763 x 100 =23.7% rounded to 24%

Original cost of the asset                                                Rs.
Less: Depreciation-year1@24%                             30,000     
                                                                                           7,00
                                                                                         22,800
Less: Depreciation-year2@24%                                 5,470                  
                                                                                          17,330
Less: Depreciation-year3@24%                                  4,160
                                                                                           13,170

Total Depreciation = Rs. 7,200 + Rs. 5,470 + Rs. 4,160/ = Rs. 16,830

Other Sample Assignments in Accounting Homework Assignment :

Calculate Cost of Land and Building	Calculate Depreciation
Calculate Depreciation By Equal	Calculate Depreciation Diminishing Balance
Calculate Depreciation Expense	Inventory Valuation
Calculate Cost Of Sale	Calculate Inventory And Profit
Fifo Lifo	Financial Statements profit and loss
Financal Statements

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