Bissoy.com
Doctors Medicines MCQs Q&A

Which of the following expression is used to calculate 'Annual depreciation' by straight line method? Where 'O' is original value, 'S' is scrape value and 'N' life of structure in years.

Which of the following expression is used to calculate 'Annual depreciation' by straight line method? Where 'O' is original value, 'S' is scrape value and 'N' life of structure in years. Correct Answer (O - S) / N

Explanation:

Depreciation: Decrease or loss in the value of a property due to structural deterioration use, wear and tear, decay and obsolescence. 

Method of calculating depreciation:

  1. Straight line method
  2. Constant percentage method
  3. Sinking fund method
  4. Quality survey method


Straight line method:

Annual depreciation (D) = (Original cost – Scrap value)/ Life in years

D = (O – S)/N

Book value after N years = Original cost – N × D

Related Questions

A company owns some land and buildings for which the following details are relevant : Cost of land Taka 50,000; cost of building Taka 100,000, estimated life of building 20 years, estimated residual value of building Taka 2000; estimated residual value of land Taka 50,000. The company uses the straight line depreciation method. Which is the correct annual depreciation charge for this asset?
A mining equipment has a life of 5 years with no salvage value. Assuming that the depreciation of the equipment is calculated by the straight line method, the average annual value of the equipment percentage of its original value is
The original cost of an equipment is Rs.10,000. Its salvage value at the end of its total useful life of five years is Rs. 1,000. Its book value at the end of two years of its useful life (as per straight line method of evaluation of depreciation) will be
A company purchased a vehicle for Rs.6000. It will be used for 5 years and its residual value is expected to be Rs.1000. What is the annual amount of depreciation using straight line method of depreciation?
Cost of Asset = Rs. 21,000
Scrap value = Rs. 1,000
Depreciation rate = 10% p.a.
What will be the depreciation for the second year if depreciation is charged by straight line method?
An asset is purchased for Rs. 50,000 on which depreciation is charged according to straight line method. The useful life of asset is 10 years and its residual value is Rs. 10,000. The rate of depreciation will be
Eight members of a family – Archana, Suman, Dheeraj, Meghana, Bindu, Tilak, Rajan and Kiran are sitting in a straight line facing North. They have different ages – 12,17, 19, 22, 28, 31, 38 and 48 but not necessarily in the same order. Archana is sitting third to the right of the one who is 22 years old. Meghana and the one who is 22 years old are sitting together. One person is sitting between Kiran and one whose age is 48 years. The difference between the ages of Bindu and Kiran is 5 years. The one who is 10 years older than Meghana is sitting third to the right of Meghana. Rajan and Dheeraj are sitting together and one of them is sitting at the extreme end of the line. Dheeraj is 9 years older than Suman. Archana is sitting in the middle of Kiran and Tilak. Archana is 12 years younger than Dheeraj. Kiran is not 12 years old. Who is sitting third to the right of Meghana?
As a salesperson, Poly can choose one of two methods of annual payment either an annual salary of Tk. 35,000 with no commission or an annual salary of Tk. 10,000 plus a 20 percent commission on her total annual sales. What must her total annual sales be to give her the same annual pay with either method?
A machine has an initial value of Rs. 5000, service life of 5 years and final salvage value of Rs. 1000. The annual depreciation cost by straight line method is Rs.
A machine is purchased for Rs. 10,000,00 and has an estimated life of 10 years. The salvage value at the end of 10 years is Rs. 1,50,000. The book value of the machine at the end of 5 years using general straight line method of evaluation of depreciation is