Under straight line method, the amount of depreciation is ____.

Depreciation is caused by ____.

A depreciable asset may suffer obsolescence due to______.

Residual value of an asset means the amount that it can fetch on sale at the ________of its useful life.

In every business, certain ____________ assets are usedfor the conduct' of business operations.

_________ is a non-depreciable asset.

If the sale price of an asset is less than, the book value of the asset, it denotes _______________

Depreciation arises due to the following reason ____________

Assertion (A): Business enterprises use certain fixed assets for the conduct of business operations.
Reason (R): The process of allocation of the relevant cost of a fixed asset over its useful life is known as depreciation.
Select the correct answer.
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true and (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false.
(d) (A) is false, but (R) is true.

Assertion (A): When the amount of depreciation charged over its life is plotted on a graph and the points are joined together, the graph will show a horizontal straight line.
Reason (R): Scrap value is also known as residual value.
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true and (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true

What is meant by depreciation?

List out the various methods of depreciation.

What is annuity method?

What is sinking fund method?

A furniture costing Rs 5,000 was purchased on 1.1.2016, the installation charges being Rs 1,000. The furniture is to be depreciated @10% p.a. on the diminishing balance method. Pass journal entries for the first two years.

Calculate the amount of depreciation and depreciation rate from the following by using ‘straight line method’. Also give journal entries for the first two years. The books are closed on 31st December every year.

State any two merits of Straight line method.

Define Depreciation.

What are the causes for depreciation?

Distinguish between straight line method and written down value method of providing depreciation.

Machinery was purchased on 1^st January 2015 for Rs. 4,00,000. Rs. 15,000 was spent on its erection and Rs. 10,000 on its freight charges. Depreciation is charged at 10% per annum on straight line method. The books are closed on 31^st March each year. Calculate the amount of depreciation on machinery for the first two years.

Write a short note on - Revaluation Method :

A manufacturing company purchased on 1 April, 2010, a plant and machinery for Rs. 4,50,000 and spent Rs. 50,000 on its installation. After having used it for three years, it was sold for Rs. 3,85,000. Depreciation is to be provided every year at the rate of 15% per annum on the fixed instalment method. Accounts are closed on 31^st March every year. Calculate profit or loss on sale of machinery.

On 1^st January 2015, a second hand machine was purchased for Rs. 58,000 and Rs. 2,000 was spent on its repairs. On 1^st July 2017, it was sold for Rs. 28,600. Prepare the machinery account for the years 2011 to 2013 under written down value method by assuming the rate of depreciation as 10% p.a. and the accounts are closed on 31^st December every year.

Ramu Brothers purchased a machine on 1st July 2016 at a cost of Rs.14,000 and spent Rs.1,000 on its installation. The firm writes off depreciation at 10% of original cost every year. The books are closed on 31st December every year. Give journal entries and prepare machinery account and depreciation account for 2 years

M/s Ramco textile mills purchased machinery on 1st April 2014 for Rs.2,00,000 on credit from M/s. Nila & Co. and spent Rs.10,000 on its installation. Depreciation is provided at 10% per annum on the written down value method. Prepare machinery account and depreciation account for the first three years. Books are closed on 31^st March every year.