Class 11 Accountancy - Chapter Depreciation, Provisions and Reserves NCERT Solutions | Basaria Confectioner bought a cold stora

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Question 1

Basaria Confectioner bought a cold storage plant on July 01, 2014 for 1,00,000. Compare the amount of depreciation charged for first three years using:

  1. Rate of depreciation @ 10% on original cost basis;
  2. Rate of depreciation @ on written down value basis;
  3. Also, plot the computed amount of depreciation on a graph.

Answer

Depreciation for 1 year (2014-15) = 7500 (Charged for 9 months)

Depreciation for 2 year (2015-16) = 1,00,000 – 7500 = 92,500
= ₹ 92500 × 10/100 = ₹ 9250

Depreciation for 3 year (2016-17) = ₹ 92500 – ₹ 9250 = 83050
= ₹ 83050 × 10/100 = ₹ 8305

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