If an asset costs Rs. 50,000 with an estimated useful life of 6 years and a scrap value of Rs. 5000. Then by using a linear depreciation method, the annual depreciation of the asset will be:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Rs. 7,500
GivenCost of asset: $C = 50000$, Useful life: $n = 6$ years, Scrap value: $S = 5000$
Annual depreciation (linear method):
$D = \frac{C - S}{n} = \frac{50000 - 5000}{6} = \frac{45000}{6} = 7500$