Multiple choice

A machinery is purchased on August 1, 2011 for Rs. 1,20,000. It was put into use with effect from October 1, 2011. If it is to be depreciated @ 25% p.a, what should be the amount of depreciation for the year ended on March 31, 2012?

  1. Rs. 30,000

  2. Rs. 20,000

  3. Rs. 1,500

  4. Rs. 15,000
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

This is the correct answer. The amount of depreciation is charged for 6 months, i.e. October 1 to  March 31 as: 1,20,000 * 25% * 6/12 = Rs. 15,000

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