An old building has been purchased by a person at a cost of Rs. 30000 excluding the cost of the land. Calculate the amount of annual sinking fund at 4% interest assuming the future life of the building as 20 years and the scrap value of the building as 10% of the cost of purchase.

Q: Cost of machine = P 1.4 MUseful life = 8 yearsSalvage value = P10, 000Determine the 4thyear…

A:

Q: The purchase cost of an excavating machine is $200,750. After a useful life of 6 years, it is…

A: Given, Present value P=200750 $ N=6 years  Salvage value F= 45000 $ Interest i=12.7 %

Q: An asset costs $17450 and has a scrap value of $9700 after 5 years. Calculate its book value using…

A:

Q: Using declining-balance depreciation with d = 18 percent, what is the depreciation charge in the 9…

A: Initial cost = $156400  Depreciation, d= 18 percent

Tax Significance of Depreciation

While calculating taxes, depreciation is the method used to allocate the cost of a tangible or immovable asset over the useful life of an asset. In other words, allocate part of that cost to the times when tangible assets help generate revenue or sales. By recording the depreciation of an asset, depreciation reduces the amount of taxes a company or business pays in tax deductions.