Question 14 of 33
Q.An asset is purchased for ₹ 50,000. The rate of depreciation is 15% p.a. Calculate the annual depreciation for the first two years under diminishing balance method.
Puducherry TnboardTamil Nadu HSC First Year (DGE) Commerce Board 2022Subjective· 3mImportance★★★★★
42% · 14/33 Questions
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Start your 14-day free trial to unlock the full solution →Diminishing balance depreciation: Year 1 = ₹7,500; Year 2 = ₹6,375 (charged on the reduced balance ₹42,500).
Under the diminishing balance method (written down value method) in the Tamil Nadu HSC Class-11 Accountancy syllabus, depreciation is charged at a fixed percentage on the book value at the beginning of each year. Because the book value falls each year, the depreciation amount also reduces year after year.
Year 1
| Particulars | ₹ |
|---|---|
| Cost of asset | 50,000 |
| Depreciation @ 15% on ₹50,000 | 7,500 |
| Written down value at end of Year 1 | 42,500 |
Year 2
| Particulars | ₹ |
|---|---|
| Opening book value | 42,500 |
| Depreciation @ 15% on ₹42,500 | 6,375 |
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