the balance of the machinery as on 1 april 2008 is 567000 ... but the machinery is purchased in 1 april 2006 ... and the depreciation is charged as per wdv method ... the rate of depreciation is 10 % ... how to find the cost of the assest ?? any alternative or mere estimation ??
8 Replies
CA Himanshu Khurana
(Chartered Accountant)
(813 Points)
Replied 26 May 2011
Use Prsent Value
=567000 / 90% = 630000
=630000 / 90% = 700000
Pothuganty sudheer
(Consultant, C.A, C.S)
(411 Points)
Replied 26 May 2011
I agree with Himanshu , but if scrap value is considered while arriving Depreciation percentage of 10% we have to
adjust scrap value also for finding out the cost of asset.
This is only my view
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 26 May 2011
| Originally posted by : himanshu | ||
 |
Use Prsent Value =567000 / 90% = 630000 =630000 / 90% = 700000 |
 |
Umesh Daga
(Student)
(68 Points)
Replied 27 May 2011
In CPT, we are allowed to use Calc.
So, the easiest way to calculate is
Present Value / ( 1 - rate of depri in decimal ) then press " = " for the number of years given.
For ur question it will be like,
567000 / 0.9 then press = TWO times.
Answer works out to be 700000.
shakuntala chhangani
(FCA Course co-ordinator WIRC coaching centre)
(2525 Points)
Replied 31 May 2011
Hi mridul, the answer to ur question is :
the machinery is being depreciated for two years on WDV basis. its book value now is
Book value at the end of first year = HC - 10% depreciation = 90 % of historical cost
BV at the end of second year = BV at the end of 1st year - 10% dep. = 90% of BV at the end of 1st year
It means BV at the end of 1st year is 90% of HC and BV at the end of 2nd year is 90% of BV of 1st year.
it can be written as
BV at the end of second year = HC x 90% X 90%
5,67,000 = HC x 90% x 90%
therefore HC = 5,67,000 = Rs. 7,00,000 .
90%x90%
Regards, CA Shakuntala Chhangani
Rajnikant Vadigoppula
(CA, CS And CMA Final)
(919 Points)
Replied 31 May 2011
let us assume cost is 100 then after 1st year wdv is 90 then after 2nd year 81.
if 81 is 567000 then 100=????
100=Rs.700000
Rajnikant Vadigoppula
(CA, CS And CMA Final)
(919 Points)
Replied 31 May 2011
i agree with the above parties i m provided different method.
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