Multiple choice

On October 01, 2003 two machines costing Rs. 40, 000 and Rs. 30, 000 respectively, were purchased. On March 31, 2007 both the machines had to be discarded because of damage and had to be replaced by two machines costing Rs. 50, 000 and Rs. 40, 000 respectively

One of the discarded machine was sold Rs. 12, 000 and against the other it was expected that Rs. 10, 000 would be realised. The firm provides depreciation @ 15% on written down value

The total amount of depreciation written off on the two machines till they were discarded is

  1. Rs. 42, 000

  2. Rs. 30, 236

  3. Rs. 27, 190

  4. Rs. 36, 388

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B Correct answer