A TV set costing Rs. 55,000 has a useful life of 8 years. If annual depreciation is Rs. 5,000, then the scrap value by straight line method is
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Rs. 15,000
By the straight line method, the total depreciation over the useful life is subtracted from the cost:
\( \displaystyle \text{Scrap value}=55000-8\times 5000 \)
\( \displaystyle =15000 \)
So the scrap value is Rs. 15,000.