An excavator costs Rs. 20,00,000 and has an estimated life of 8 years. It has no salvage value at the end of 8 years. The book value of the excavator at the end of 3 years using general double declining balance method is
A. Rs. 8,43,750
B. Rs. 8,75,000
C. Rs. 10,50,000
D. Rs. 11,56,250
Answer: Option A
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Comments ( 3 )
The normal time required for the completion of project in the above problem is
A. 9 days
B. 13 days
C. 14 days
D. 19 days
A. $$\frac{{{{\text{t}}_{\text{o}}} + 3{{\text{t}}_{\text{m}}} + {{\text{t}}_{\text{p}}}}}{2}$$
B. $$\frac{{{{\text{t}}_{\text{o}}} + 3{{\text{t}}_{\text{m}}} + {{\text{t}}_{\text{p}}}}}{3}$$
C. $$\frac{{{{\text{t}}_{\text{o}}} + 4{{\text{t}}_{\text{m}}} + {{\text{t}}_{\text{p}}}}}{4}$$
D. $$\frac{{{{\text{t}}_{\text{o}}} + 4{{\text{t}}_{\text{m}}} + {{\text{t}}_{\text{p}}}}}{5}$$
E. $$\frac{{{{\text{t}}_{\text{o}}} + 4{{\text{t}}_{\text{m}}} + {{\text{t}}_{\text{p}}}}}{6}$$
A construction schedule is prepared after collecting
A. Number of operations
B. Output of labour
C. Output of machinery
D. All the above
A. 3.5 and $$\frac{5}{6}$$
B. 5 and $$\frac{{25}}{{36}}$$
C. 3.5 and $$\frac{{25}}{{36}}$$
D. 4 and $$\frac{5}{6}$$
Cost of asset=20, 00,000
Useful life= 8years
Depreciation rate=1/8*100=12.5%
Double declining balance formula=2*cost of asset*depreciation rate
1st year=2*2000000*12.5%=500000
So book value at the end of 1st year= 20L-5L=15L
2nd year=2*1500000*12.5%=375000
Book value at the end of 2nd year=15L-3.75L=11.25L
3rd year=2*1125000*12.5%=281250
Book value at the end of 3rd year= 11.25L-281250=843750
Solve?
DEPRECIATION (D) = {(2/N)*Initial Cost}
Book Value = Initial Cost - D
D1 = (2/8)*2000000 =500000
BV1= 2000000-500000 =1500000
D2 = (2/8)*1500000=375000
BV2=1500000-375000=1125000
D3=(2/8)*1125000=281250
BV3=1125000-281250=843750
ANS: A