Multiple choice

Consider the following information: I. Rate of depreciation under the written down method = 20% II. Original cost of asset = Rs. 2, 00, 000 III. Residual value of the asset at the end of useful life = Rs. 81, 920

Depreciation for 3rd year =

  1. Rs. 40, 000

  2. Rs. 32,000

  3. Rs. 25, 600

  4. Rs. 20, 480
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Year 1 depreciation: 2,00,000 × 20% = 40,000. WDV after Year 1: 2,00,000 - 40,000 = 1,60,000. Year 2 depreciation: 1,60,000 × 20% = 32,000. WDV after Year 2: 1,60,000 - 32,000 = 1,28,000. Year 3 depreciation: 1,28,000 × 20% = 25,600 ✓

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