A machine costing Rs. 2,00,000 has a useful life of 6 years. The estimated scrap value is Rs. 20,000. Using straight line method, the annual depreciation is
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Rs. 30,000
Under the straight line method, the machine loses the same amount every year.
\( \displaystyle \text{Annual depreciation}=\frac{\text{Cost}-\text{Scrap value}}{\text{Useful life}} \)
\( \displaystyle =\frac{200000-20000}{6} \)
\( \displaystyle =30000 \)
So the annual depreciation is Rs. 30,000.
CBSE Applied Mathematics (Class XII):
Depreciation
