Answer to Question #135175 in Accounting for Ankit

Question

A machine was purchased on 1 st april, 2008. The balnce of his machine on 31 st march ,2011 is ₹ 5,83,200. Depreciation is charged @ 10% p.a. on written down value method. What was the cost price of the machine on 1 st apirl,2008 ?

Answer 1

solution

$$period, n = 3 \ years$$ $$residual, r = 583,200$$ $$depreciation, d= 0.01$$

$$Residual, r = Initial\ cost, C (1-depreciation, d)^n$$ $$583,200 = C*(0.9)^3$$ $$C =\frac{583,200}{0.9^3} = 800,000$$

Answer: The cost of the machine was ₹ 800,000