On 1st April 2024, person 'X' purchased a machinery costing ₹65000 and spent ₹10000 on its installation. The estimated effective life of the machinery is 5 years with a scrap value of ₹10000. The annual depreciation using the straight-line method with the accounting year ending on 31st March 2025 is:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → ₹13000
Cost of machinery $=65000$
Installation charges $=10000$
Total cost $=75000$
Scrap value $=10000$
Depreciable amount $=75000-10000=65000$
Effective life $=5$ years
Annual depreciation (SLM):
$\frac{65000}{5}=13000$
final answer: ₹13000