Q.Find out the rate of depreciation under Straight Line method from the following details :
Original cost of the asset - ₹ 10,000
Estimated life of the asset - 10 years
Estimated scrap value at the end - ₹ 2,000

Annual depreciation = (Cost − Scrap) ÷ Life = ₹800; rate = 800/10,000 × 100 = 8% p.a.

Given: Original cost = ₹10,000; Estimated scrap value = ₹2,000; Estimated life = 10 years.

Step 1 — Annual depreciation (straight line):

$\text{Annual depreciation} = \frac{\text{Cost} - \text{Scrap value}}{\text{Estimated life}} = \frac{10{,}000 - 2{,}000}{10} = \frac{8{,}000}{10} = ₹800$

Step 2 — Rate of depreciation (as a percentage of original cost):

…