Question

Q#2 A machine acquired at the beginning of the fiscal year at a cost of Rs. 45,200 has an estimated residual value of Rs. 2,000 and an estimated useful life of 8 years. Determine the depreciation for each of the first five years 

(a) by the straight line method, 

(b) by the declining-balance method, using twice the straight line rate (25%) and 

(c) by the sum of the year digit method.

Answer 1

a)

$$\frac{45200-2000}{8}=5400$$

b)

$$0.25\times (45200-2000)=10800$$

$$0.25\times (45200-2000-10800)=8100$$

$$0.25\times(45200-2000-10800-8100)=6075$$

$$0.25\times(45200-2000-10800-8100-6075)=4556.25$$

$$0.25\times 13668.75=3417$$

c)

$$\frac {45200\times8}{36}=10044$$

$$\frac {45200\times7}{36}=8788$$

$$\frac {45200\times6}{36}=7533$$

$$\frac {45200\times5}{36}=6277$$

$$\frac {45200\times4}{36}=5022$$