Practice Test

A firm, which depreciates its machinery at 10% p.a. on WDV method, had on 1st April,2002 Rs.9,72,000 in the debit of machinery account. During the year ended 31st March,2003, a part of the machinery purchased on 1st April,2000 for Rs.80,000 was sold for Rs.45,000 on 1st October,2002 and a new machinery at a cost of Rs.1,50,000 was purchased and installed on the same date, installation charges being Rs.8,000. On 31st March,2003, the firm decided to change its method of charging depreciation from WDV method to SLM with effect from April,2000 the rate of depreciation remaining the same as before.Depreciation on machine sold up to 1.10.2002 in year 2002-2003 will be Rs. _______.

A new machine costing Rs.1,00,000 was purchased by a company on 1st April,2011. Its useful life is estimated to be 5 years and scrap value at Rs.10,000. The production hours for the next 5 years is as follows:Year Hours2011-12 5,0002012-13 10,0002013-14 12,0002014-15 20,0002015-16 25,000Depreciation for year 2013-14 = ?

For which of the following Inventory system of depreciation can be applied?