A school buys a photocopier for Rs. 75,000. Its useful life is 7 years, after which its scrap value will be Rs. 5,000. Using the straight line method, the total depreciation charged in the first 5 years is
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Rs. 50,000
By the straight line method, the same amount is charged every year:
\( \displaystyle D = \frac{C - S}{n} = \frac{75000 - 5000}{7} = 10000 \)
In 5 years the total depreciation is
\( 10000 \times 5 = 50000 \)
Why the other options are incorrect
Option (1) Rs. 53,571.43 — Incorrect. This is 75,000 × 5 ÷ 7, which ignores the scrap value.
Option (3) Rs. 25,000 — Incorrect. This is the book value at the end of the 5th year (75,000 − 50,000), not the depreciation.
Option (4) Rs. 10,000 — Incorrect. This is the depreciation of one year only.