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Account 3 Marks Question

Depreciation · CBSE STD 11 Commerce (CBSE - English Medium). 5 questions.

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Question 13 Marks
“In case of a long term asset, repair and maintenance expenses are expected to rise in later years than in earlier year”. Which method is suitable for charging depreciation if the managernent does not want to increase burden on Profit & Loss Account on account of depreciation and repair.
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Question 23 Marks
A machine was purchased on 1st April, 2013. The balance of this machine on 31st March, 2016 is ₹ 5,83,200. Depreciation is charged @ 10% p.a. on written down value method. What was the cost price of the machine on 1st April, 2013?
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Question 33 Marks
Original Cost of a Machinery ₹ 5,00,000; Salvage value ₹ 20,000; Expected useful life 10 years. What will be the amount of depreciation for the fourth year according to original cost method? Also specify the rate of depreciation.
Answer
Depreciation $=\frac{5,00,000-20,000}{10}= ₹ \ 48,000$ ache year.Thus depreciation for IVth year will also be ₹ 48,000.
Rate of Depreciation $=\frac{48,000}{5,00,000}\times100=9.6%$
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Question 43 Marks
State two demerits of Reducing Instalment Method of providing depreciation.
Answer
Demerits of Reducing Instalment Method of providing depreciation:
  1. Assets cannot be completely written off: Under this method, the value of an asset, even if it becomes obsolete and useless, cannot be reduced to zero and some balance, however small, would continue on Asset Account.
  2. Omission of Interest Factor: As with the original cost method, this method also does not take into consideration the loss of interest on the amount invested in the asset.
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Question 53 Marks
Original cost of a Machinery ₹ 5,20,000; Salvage Value ₹ 20,000. What will be the amount of depreciation for second year according to diminishing balance method @ 10% p.a.
Answer
Depreciation for first year $=5,20,000\times\frac{10}{100}=₹\ 52,000$
Depreciation for second year $=(5,20,000-52,000)\times\frac{10}{100}=₹\ 46,800.$
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3 Marks Question - Account STD 11 Commerce Questions - Vidyadip