A dining table costing Rs. 40,000 has a useful life of 10 years. If the annual depreciation is Rs. 2000, then its scrap value using a linear method is
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Rs. 20,000
Under the linear (straight line) method, the same depreciation is charged every year:
\( \displaystyle \text{Scrap value}=40000-10\times 2000 \)
\( \displaystyle =\text{Rs. }20000 \)