A mobile phone costing ₹50000 has a useful life of 5 years. If the annual depreciation is ₹5000, then by using a linear method, its scrap value is
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → ₹25000 **
The cost of the mobile phone is ₹50000.
The annual depreciation is ₹5000 and the useful life is 5 years.
Total depreciation over 5 years:
$5\times 5000 = 25000$
Scrap value = Original cost − Total depreciation
$50000 - 25000 = 25000$
The scrap value of the mobile phone is ₹25000.
Thus, the required scrap value is ₹25000.