1. Suppose company bought the following assets on April 1, 2006: (Rs.

in 000) Assets Cost Residual Useful Depreciation value life method Machinery 1000 50 5 years Written down value (depreciation rate-45%) Building 1400 200 20 Straight line years After using these assets for three years, the company has decided to change its depreciation policy as follows: a) Change the method of depreciation for machinery to the straight line method. b) Revise the useful life of building to 28 years. Keeping its residual value same. These changes are to be implemented in the financial statements for year 4 i.e in accounting year 2009-10 i) Compute the depreciation expense for year 4 without giving effect to the change in depreciation policy. What is the effect of change on (increase or decrease in) profit before tax for year 4? ii) What could be management intention behind change in depreciation method? Suppose If change in method suggested by law specified by authority governing the industry, what disclosures company has to make relating to change in its financial statements?

Anand Readymade has three assets, the relevant details of which re:
date of Assts purchased cost 01-08counters 1996 50000 Name 01-04board 1996 12000 Cash 01-12box 1996 4000 residual value (scrap) 4, 000 600 800 useful life( ye depreciation ar) method sum of year 8 digit written down 5 value 10 straight line

Compute the depreciation expenses for the period ended June 30 in 1997, 1998,