"Depreciation is provided to not only cover capital expenditure during the span of Assets life, but also to accumulate required funds for the replacement of the PPE" Explain this statement. Also differentiate two popular method of depreciation with suitable figures. 1.
"Depreciation is provided to not only cover capital expenditure during the span of Assets life, but also to accumulate required funds for the replacement of the PPE" Explain this statement. Also differentiate two popular method of depreciation with suitable figures. 1.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
!["Depreciation is provided to not only cover capital expenditure during the span of
Assets life, but also to accumulate required funds for the replacement of the PPE" Explain this
statement. Also differentiate two popular method of depreciation with suitable figures.
1.
"A systematic procedure has been adopted for the issue of Accounting Standard in
India" Justify this statement.
2.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8637c323-ce62-41dc-8165-e815f597f1d6%2F908d8daf-1ffb-4e18-89ee-03a8a39fb46d%2F55wyg3bh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:"Depreciation is provided to not only cover capital expenditure during the span of
Assets life, but also to accumulate required funds for the replacement of the PPE" Explain this
statement. Also differentiate two popular method of depreciation with suitable figures.
1.
"A systematic procedure has been adopted for the issue of Accounting Standard in
India" Justify this statement.
2.
![Bombay Okara Corporation Ltd. Purchased on 1" January 2015 from Delhi Motors five
trucks costing Rs. 50,000 cach on the hire purchase system. The payment was to be made as:
10% of cash price down and 25% of cash price at the end of four subsequent half years. The
payment due on 31ª December 2015 could not be made and hence the trucks were by the
4.
vendor.
But after negotiation, the hire purchaser was allowed to keep three trucks on the condition
that the value of the other two trucks would be adjusted against the amount due, the truck
being valued at cost less 25% depreciation. Bombay Corporation closed its books on 30 June](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8637c323-ce62-41dc-8165-e815f597f1d6%2F908d8daf-1ffb-4e18-89ee-03a8a39fb46d%2Fgyrjqk5_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Bombay Okara Corporation Ltd. Purchased on 1" January 2015 from Delhi Motors five
trucks costing Rs. 50,000 cach on the hire purchase system. The payment was to be made as:
10% of cash price down and 25% of cash price at the end of four subsequent half years. The
payment due on 31ª December 2015 could not be made and hence the trucks were by the
4.
vendor.
But after negotiation, the hire purchaser was allowed to keep three trucks on the condition
that the value of the other two trucks would be adjusted against the amount due, the truck
being valued at cost less 25% depreciation. Bombay Corporation closed its books on 30 June
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