Depreciation Provisions and Reserves Test

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Depreciation Provisions and Reserves Test - 40

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Weekly Quiz Competition

Question 1
1 / -0

A manufacturer owns three machines - the first acquired on 1.1.2011 for Rs. $$1,10,000$$, the second on 1,7,2013 for Rs.$$90,000$$, and the third on 1.10.2015 for Rs. $$1,30,000$$. He expects to use each machine for ten years and realize the scrap for Rs. $$10,000$$. Using the straight-lie method what is his depreciation for the year ended 31.12.2015?

A
$$33,000$$

B
$$21,000$$

C
$$30,000$$

D
$$12,000$$
Question 2
1 / -0

A firm owns a fleet of vehicles acquired at a total cost of Rs. $$2,64,800$$. Accumulated depreciation up to the beginning of the current year is RS. $$1,12,400$$. Vehicles are depreciated at $$20$$% p.a using the straight-line method. The written down value of the vehicles by the end of the current year would be -

A
Rs. $$99,440$$

B
Rs. $$52,960$$

C
Rs. $$2,11,840$$

D
Rs. $$1,52,400$$
Question 3
1 / -0

Which of the following is/are advantage of Reducing balance method/WDV method?

A
Under this method it is easy to calculate depreciation rate.

B
Income tax authorities do not accept this method.

C
The efficiency and usefulness is more in early years so depreciation amount is also more in early years and goes on diminishing year to year.

D
All of the above.
Question 4
1 / -0

Machinery costing Rs. $$20,00,000$$ was purchased on 1.4.2012. The installation charges amounting Rs. $$5,00,000$$ were incurred. The depreciation at $$10$$% p.a on straight line method for the year ended 31st March, 2013 will be -

A
$$1,50,000$$

B
$$2,50,000$$

C
$$2,00,000$$

D
$$50,000$$

Solution

Purchase Price of machine = 20,00,000
Installation charges = 5,00,000
Total cost of machine = 25,00,000
Depreciation = 25,00,000*10/100
= 2,50,000.
Question 5
1 / -0

V Ltd acquired machine on 1st July, 2010 at a cost of Rs. $$15,000$$. The firm writes off depreciation at $$10$$% pa.a on WDV. The books are closed on 31st March every year. On 30th June 2013 machine sold for Rs. $$8,000$$. Profit/Loss on sale = ?

A
Profit - Rs. $$2,958$$

B
Loss - Rs. $$2,958$$

C
Profit - Rs. $$3,375$$

D
Loss - Rs. $$3,375$$
Question 6
1 / -0

A Ltd. acquired a machine on 1st January, 2010 at a cost of Rs. $$14,000$$ and spent Rs. $$1,000$$ on its installation. The firm writes off depreciation at $$10$$% p.a. of the original cost every year. The books are closed on 31st December every year. After 3 years machine sold for Rs. $$9,000$$. Profit/Loss on sale = ?

A
Profit-Rs. $$1,500$$

B
Loss- Rs. $$1,500$$

C
Profit - Rs. $$800$$

D
Loss - Rs. $$800$$
Question 7
1 / -0

N Ltd. Purchase Machinery for Rs. $$10,00,000$$ on 1.1.2012. Installation expenses were Rs.$$50,000$$. Life of the asset is 6 years at the end of which asset can be sold at Rs. $$30,000$$. Annual depreciation under straight line method will be = ?

A
Rs. $$1,80,000$$

B
Rs. $$1,66,667$$

C
Rs. $$1,70,000$$

D
Rs. $$1,71,667$$
Question 8
1 / -0

C Ltd. acquired a machine on 1st January, 2010 at a cost of Rs. $$14,000$$ and spend Rs. $$1,000$$ on its installation. The firm writes off depreciation at $$10$$% p.a of the original cost every year. The books are closed on 31st December every year. On 31st May 2013 machine sold for Rs. $$8,000$$. Profit/Loss on sale = ?

A
Profit - Rs. $$2,275$$

B
Loss - Rs. $$2,275$$

C
Profit - Rs. $$1,875$$

D
Loss - Rs. $$1,875$$
Question 9
1 / -0

Original cost =Rs. $$88,200$$. Salvage value $$4,200$$. Useful Life $$=3$$ years. Depreciation rate = ?

A
$$33.333$$%

B
$$31.746$$%

C
$$34.921$$%

D
None of the above
Question 10
1 / -0

Original cost =Rs. $$1,76,400$$. Salvage value $$=8,400$$.Useful Life$$6$$ years. Annual depreciation under SLM =?

A
$$29,400$$

B
$$28,000$$

C
$$30,800$$

D
None of the above

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Depreciation Provisions and Reserves Test - 40

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Depreciation Provisions and Reserves Test - 40

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SHARING IS CARING

Question 1

$$33,000$$

$$21,000$$

$$30,000$$

$$12,000$$

Question 2

Rs. $$99,440$$

Rs. $$52,960$$

Rs. $$2,11,840$$

Rs. $$1,52,400$$

Question 3

Under this method it is easy to calculate depreciation rate.

Income tax authorities do not accept this method.

The efficiency and usefulness is more in early years so depreciation amount is also more in early years and goes on diminishing year to year.

All of the above.

Question 4

$$1,50,000$$

$$2,50,000$$

$$2,00,000$$

$$50,000$$

Solution

Question 5

Profit - Rs. $$2,958$$

Loss - Rs. $$2,958$$

Profit - Rs. $$3,375$$

Loss - Rs. $$3,375$$

Question 6

Profit-Rs. $$1,500$$

Loss- Rs. $$1,500$$

Profit - Rs. $$800$$

Loss - Rs. $$800$$

Question 7

Rs. $$1,80,000$$

Rs. $$1,66,667$$

Rs. $$1,70,000$$

Rs. $$1,71,667$$

Question 8

Profit - Rs. $$2,275$$

Loss - Rs. $$2,275$$

Profit - Rs. $$1,875$$

Loss - Rs. $$1,875$$

Question 9

$$33.333$$%

$$31.746$$%

$$34.921$$%

None of the above

Question 10

$$29,400$$

$$28,000$$

$$30,800$$

None of the above

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