Multiple choice

A machine costing Rs. 6,60,000 was purchased on 1 April, 2009. It has estimated scrap value of Rs. 60,000. It is estimated that it will produce 60,000 units during its working life. It produced 4,800 units during the year ending 31 March, 2010. The depreciation to be charged for the year ending 31 March, 2010 will be

  1. Rs. 52,800

  2. Rs. 24,000

  3. Rs. 48,000

  4. Rs. 6,00,000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Total depreciation during working life = 6,60,000 - 60,000 = 6,00,000 Depreciation per unit = 6, 00, 000/60,000 = Rs.10 Thus, chargeable depreciation = 4800*10 = 48, 000 If depreciation per unit is taken as 6, 60, 000/60,000 = Rs. 11, then depreciation 4800*11 = 52, 800 24,000 is the depreciation @ Rs. 5 while Rs. 6, 00, 000 is the depreciation of full life.

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