Question : Calculate ‘Depreciation on Capital Asset’ from the following data:
The capital value of the asset = 1000
Estimated life of the asset = 20 years
Scrap value = Nil
Option 1: 49
Option 2: 50
Option 3: 47
Option 4: 51
Answer (1)
26th Jan, 2024
Correct Answer: 50
Solution : The correct answer is (b) 50
To calculate Depreciation on a Capital Asset using the straight-line method, we can use the following formula:
Depreciation = (Capital Value of the Asset - Scrap Value) / Estimated Life of the Asset
Capital Value of the Asset = 1000
Estimated Life of the Asset = 20 years
Scrap Value = Nil
Depreciation = (1000 - 0) / 20
Depreciation = 50
Therefore, the value of Depreciation on the Capital Asset is 50.
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