PRC-1 · Chapter 6 · Question 53 of 100
A machine was bought on 1 March 2022 for Rs. 250,000 with a residual value of Rs. 20,000. Its expected life is 100,000 machine hours. For the year ended 31 December 2022, the machine operated for 15,000 hours. What is the depreciation charge?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 34,500
Explanation
Depreciable amount = 250,000 - 20,000 = 230,000. Depreciation per hour = 230,000 / 100,000 = Rs. 2.3 per hour. Depreciation for 15,000 hours = 15,000 x 2.3 = Rs. 34,500.
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