The machinery of ₹ 35,500 is purchased on 1st July 2018 and on the same day ₹ 4,500 are spent on the installation of the Machinery.
The machinery of ₹ 35,500 is purchased on 1st July 2018 and on the same day ₹ 4,500 are spent on the installation of the Machinery. The proprietor has decided to Depreciate Machinery at the rate of 7% p.a. Calculate the amount of depreciation, assuming that accounting year is ending on 31st March every year.
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Cost of Machinery = Purchase Price + Installation Charges
= 35,500 + 4,500
= ₹ 40,000
Depreciation for 9 months = 40,000 × \(\frac{7}{100}\times\frac{9}{12}\) = ₹ 2,100
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