XYZ supplied the following information for the previous year 2020-21: Plant & Machinery WDV on 1-04-2020 200000 Purchases during 2020-21 120000 WDV of assets sold 80000 Sale proceeds of assets 70000 Plant & Machinery costing Rs 50000 was purchased further on 1st January 2021. Rate of depreciation on P&M is 15% as per IT act. You are required to calculate depreciation for the assessment year 2021-22 on the assumption that Plant & Machinery purchased during the year are installed in the office premises. Patents 80000
XYZ supplied the following information for the previous year 2020-21: Plant & Machinery WDV on 1-04-2020 200000 Purchases during 2020-21 120000 WDV of assets sold 80000 Sale proceeds of assets 70000 Plant & Machinery costing Rs 50000 was purchased further on 1st January 2021. Rate of depreciation on P&M is 15% as per IT act. You are required to calculate depreciation for the assessment year 2021-22 on the assumption that Plant & Machinery purchased during the year are installed in the office premises. Patents 80000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:XYZ supplied the following information for the previous year
2020-21:
Plant & Machinery
WDV on 1-04-2020
200000
Purchases during 2020-21
120000
WDV of assets sold
80000
Sale proceeds of assets
70000
Plant & Machinery costing Rs 50000 was purchased further on 1st
January 2021. Rate of depreciation on P&M is 15% as per IT act.
Patents
80000
You are required to calculate depreciation for the assessment year
2021-22 on the assumption that & Machinery purchased
during the year are installed in the office premises.
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