Ajesh purchased a printer Rs. 15,000. The printer is estimated to have a scrap value of Rs. 3,000 after a span of 6 years. Then the book value of the printer at the end of 3 years will be:-
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Rs. 9,000
With the straight line method (the usual method when none is named), the depreciation is the same every year:
\( \displaystyle \text{Annual depreciation} = \frac{\text{Cost} - \text{Scrap value}}{\text{Life}} \)
\( \displaystyle = \frac{15{,}000 - 3{,}000}{6} = 2{,}000 \)
The book value after 3 years is the cost less 3 years of depreciation:
\( 15{,}000 - 3 \times 2{,}000 = 9{,}000 \)