Book value of a machine is Rs. 5,83,200 as on 31March, 2016. The machine was purchased on 1st April, 2013. Depreciation is charged @ 10% written down value method. What is the original cost of machine.

 

Asked by Topperlearning User | 4th Aug, 2016, 01:26: PM

Expert Answer:

 

Let the cost of machine on 1st April, 2013

100

Depreciation for 1st year (2013-14)

10

Written Down Value

90

Depreciation for 2nd year (2014-15)

9

Written Down Value

81

Depreciation for 3rd year (2015-16)

8.1

Written Down Value

72.9

 

When, WDV is Rs.72.9 then cost

= Rs.100

When, WDV is Rs. 5,83,200 then cost

= 5,83,200*100/72.9

 

=Rs.8,00,000.

 

Answered by  | 4th Aug, 2016, 03:26: PM