PRC-1 · Chapter 6 · Question 89 of 100
At 1 January 2021, an entity had machinery with a carrying amount of Rs. 450,000. It depreciates at 20% reducing balance. What is the accumulated depreciation from the date of purchase up to 31 December 2022 if the asset was originally bought for Rs. 703,125?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Rs. 415,125
Explanation
Carrying amount on 1 Jan 2021 = 450,000. Depr 2021 = 20% * 450k = 90k. WDV at 31 Dec 2021 = 360k. Depr 2022 = 20% * 360k = 72k. Total accumulated depreciation = Original Cost (703,125) - Final WDV (360k - 72k = 288,000) = Rs. 415,125.
More Property, Plant and Equipment MCQs
- Q91A business purchased an asset but completely forgot to enter the transaction in the books. Which specific type of accounting error is this?
- Q92If an asset is revalued upwards, how does this typically affect the subsequent annual depreciation charge?
- Q93What is the correct journal entry if a business replaces a major component of an asset (like an aircraft engine)?
- Q94Which of the following is TRUE regarding 'Land' as an asset in financial accounting?
- Q95An entity disposes of an old computer. It originally cost Rs. 40,000, and Accumulated Depreciation is Rs. 35,000. It is scrapped for zero…