Multiple choice

A machine costing Rs. 9,60,000 was purchased on 15 July, 2009. It is to be depreciated at12.5% P.A. under diminishing balance method. The depreciation to be charged for year ending 31 March, 2010 will be

  1. Rs. 1,20,000

  2. Rs. 85,000

  3. Rs. 75,000

  4. Rs. 95,000
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Annual depreciation = 9, 60, 000*12.5% = 1, 20, 000 Depreciation for 8.5 months = 1, 20, 000*8.5/12 = Rs. 85, 000 Rs. 1, 20, 000 is the depreciation for full year, Rs. 75, 000 for 7.5 months and Rs. 95, 000 for 9.5 months.

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