A 3-D printer whose cost is ₹8,50,000 will depreciate to a scrap value of ₹50,000 in 4 years.
A. The Annual Depreciation amount is ₹2,00,000
B. The book value of the printer at the end of second year is ₹4,00,000
C. The depreciation rate is 25%
D. The book value of the printer at the end of third year is ₹2,50,000
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → A, C, D only
The depreciation is,
$\text{Annual Depreciation} = \frac{\text{Cost of Asset-Scrap value}}{\text{Life of Asset}}$
$=\frac{8,50,000-50,000}{4}$
$=2,00,000$
∴ Book Value = Cost - (Annual Depreciation × Years)
$=8,50,000-(2,00,000×2)$
$=4,50,000$
Now,
$\text{Depreciation Rate} = \left(\frac{\text{Annual Depreciation}}{\text{Cost}}\right)×100$
$=\left(\frac{2,00,000}{8,00,000}\right)×100=25\%$
Book Value (3 years) = Cost - (Annual Depreciation × Years)
$=8,50,000-(2,00,000×3)$
$=2,50,000$