PRC-1 · Chapter 6 · Question 25 of 100
Following the previous scenario (Cost 400k, Residual Value 40k, Life 5 yrs), what is the depreciation charge for Year 2 using the sum-of-the-years'-digits method?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 96,000
Explanation
The depreciable amount remains 360,000. For Year 2, the fraction is 4/15. Depreciation = 360,000 x (4/15) = Rs. 96,000.
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