The machinery of ₹ 35,500 is purchased on 1st July 2018 and on the s

1.	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.
Answer» 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

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.

Answer»

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