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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


Team Careers360 25th Jan, 2024
Answer (1)
Team Careers360 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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