Depreciation

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Neethu Abraham (Querist)
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12 May 2011 An asset was purchased for rs. 100000 on which depreciation was provided at the rate of 15% on Straight line method. The Written down value of the asset at the end of 2 year is_________????
I got the answer 72250.But my teacher told the answer as 70000.What is the real answer?

Pankaj

Pankaj (Expert)
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12 May 2011 Dear,

You are doing it WDV basis.

Annual Depreciation = 100000 x .15 = 15000

Two year, depr = 15000 x 2 = 30000

WDV value = 100000 - 30000 = 70000.

Don't think that when % are given, it is to be done in WDV method.
Discuss more with your teacher.

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Nayan Das

Nayan Das (Expert)
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13 May 2011 Dear Neethu,

You are doing it Written Down Value basis.

Annual Depreciation = 100000 x 15% = 15000

Two year, depr = 15000 + 15000 = 30000

Written down value of the asset at the end of 2 year is = 100000 - 30000 = 70000.

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Neethu Abraham

Neethu Abraham (Querist)
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13 May 2011 Thank u sir.