Answer Posted / nagaraju vuppala
depreciation is simply a method of allocating the cost of a tangible asset over the expected useful life of the asset. As a simple example, a machine that cost Rs1,00,000/- would depreciate at a rate of 10% per year
Depreciation Amount = Asset Value x Annual Percentage
Balance = Asset Value - Depreciation Value
, Generally we use Straight Line method
| Is This Answer Correct ? | 0 Yes | 0 No |
Post New Answer View All Answers
what is the enty for contract bill raised?
my interview is on tuesday so i just want to know everything about the interview like which type of question they will ask me as i completed m.com . please helm me plz plz
what is the Differed Tax Liability & How it is calculate ?
Do you think accounting standards are mandatory and why?
In 3 way match.....Order qty is 100 and received 90 and 10 got rejected. But the supplier sent an invoice for 100 qty. what are the steps we need to take in SAP. Whether we need to reject the invoice or process with the 90 qty .please explain with real time.
can we credit depreciation of the year to the general reserves in a balance sheet of that year? and also enlist some relevant documents or standards?
What is creative accounting?
What is the difference between costing and cost accounting?
What are the effects of international accounting standards on accounting practices of developing nations?
I got a transaction of Online Recruitment Charges, So What is the Ledger to Create?
What will be a entry for TDS deducted on Salaries, Directors Remuneration and Rent.
Explain have you ever prepared mis reports and what are these?
HOW WE MAKE A RESERVE AND AFTER ITS USE HOW WE NIL IT PLEASE MAKE A PROPER ENTRY.
How Adjust The Amount Taken By Partners For Personal Use? Is The Entry For Drawings? Even If The Amt Exceed 5 Lakhs Or As Partners Loan If Its Not Recovered Even After 1 Year? Discribe All.
Case Study: Deepak Hand tools Private Limited DHPL is a small sized firm manufacturing hand tools. It manufacturing plan is situated in Haryana. The company’s sales in the year ending on 31st March 2007 were Rs.1000 million (Rs.100 crore) on an asset base of Rs.650 million. The net profit of the company was Rs.76 million. The management of the company wants to improve profitability further. The required rate of return of the company is 14 percent. The company is currently considering an investment proposal. One is to expand its manufacturing capacity. The estimated cost of the new equipment is Rs.250 million. It is expected to have an economic life of 10 years. The accountant forecasts that net cash inflows would be Rs.45 million per annum for the first three years, Rs.68 million per annum from year four to year eight and for the remaining two years Rs.30million per annum. The plant can be sold for Rs.55 million at the end of its economic life. The company would need to raise debt to the extent of Rs.200 million. The company has the following options of borrowing Rs.200 million: a. The company can borrow funds from a nationalized bank at the interest rate of 14 percent for 10 years. It will be required to pay equal annual installment of interest and repayment of principal. b. A financial institution has offered to lend money to DHPL at 13.5 per annum but it needs to pay equated quarterly installment of interest and repayment of principal. Questions: 1. Should the company expand its capacity? Show the computation of NPV 2. What is the annual installment of bank loan? 3. Calculate the quarterly installments of the Financial Institution loan 4. Should the company borrow from the bank or from the financial institution?
