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    Irfan Ali
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    The document discusses three methods for calculating depreciation expense for a machine over three years: (1) Straight line method results in equal depreciation of Rs. 25,350 per year. (2) Double declining balance method results in higher depreciation of Rs. 51,630 in year 1, Rs. 41,304 in year 2, and Rs. 33,043 in year 3 as the book value declines. (3) Unit output method calculates depreciation per unit produced as Rs. 283,500/100,000 units and applies it to units produced each year, yielding expenses of Rs. 3,183 in year 1, Rs. 6,231 in year 2, and Rs. 9,279

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    The document discusses three methods for calculating depreciation expense for a machine over three years: (1) Straight line method results in equal depreciation of Rs. 25,350 per year. (2) Double declining balance method results in higher depreciation of Rs. 51,630 in year 1, Rs. 41,304 in year 2, and Rs. 33,043 in year 3 as the book value declines. (3) Unit output method calculates depreciation per unit produced as Rs. 283,500/100,000 units and applies it to units produced each year, yielding expenses of Rs. 3,183 in year 1, Rs. 6,231 in year 2, and Rs. 9,279

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    © All Rights Reserved
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    6 views2 pages

    Assignment by Sir

    Uploaded by

    Irfan Ali
    The document discusses three methods for calculating depreciation expense for a machine over three years: (1) Straight line method results in equal depreciation of Rs. 25,350 per year. (2) Double declining balance method results in higher depreciation of Rs. 51,630 in year 1, Rs. 41,304 in year 2, and Rs. 33,043 in year 3 as the book value declines. (3) Unit output method calculates depreciation per unit produced as Rs. 283,500/100,000 units and applies it to units produced each year, yielding expenses of Rs. 3,183 in year 1, Rs. 6,231 in year 2, and Rs. 9,279

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    of 2

    Irfan Ali (13825)

    01. Straight Line Method: Depreciation expense per year = (Cost of machine - Scrap
    value) / Useful life

    Scrap value = Rs 30,000/- Useful life = 10 years

    Depreciation expense for the year ended June 30, 2020: Depreciation expense 2020 =
    (Rs 283,500/- - Rs 30,000/-) / 10 = Rs 25,350/-

    Depreciation expense for the year ended June 30, 2021: Depreciation expense 2021 =
    (Rs 283,500/- - Rs 30,000/-) / 10 = Rs 25,350/-

    Depreciation expense for the year ended June 30, 2022: Depreciation expense 2022 =
    (Rs 283,500/- - Rs 30,000/-) / 10 = Rs 25,350/-

    02. Double Declining Method: Depreciation expense per year = (2 / Useful life) * Book
    value at the beginning of the year

    Depreciation expense for the year ended June 30, 2020: Book value at the beginning of
    2020 = Cost of machine - Depreciation expense 2020 = Rs 283,500/- - Rs 25,350/- = Rs
    258,150/- Depreciation expense 2020 = (2 / 10) * Rs 258,150/- = Rs 51,630/-

    Depreciation expense for the year ended June 30, 2021: Book value at the beginning of
    2021 = Book value at the beginning of 2020 - Depreciation expense 2020 = Rs
    258,150/- - Rs 51,630/- = Rs 206,520/- Depreciation expense 2021 = (2 / 10) * Rs
    206,520/- = Rs 41,304/-

    Depreciation expense for the year ended June 30, 2022: Book value at the beginning of
    2022 = Book value at the beginning of 2021 - Depreciation expense 2021 = Rs
    206,520/- - Rs 41,304/- = Rs 165,216/- Depreciation expense 2022 = (2 / 10) * Rs
    165,216/- = Rs 33,043.2/-

    03. Unit Output Method: Depreciation per unit = (Cost of machine - Scrap value) / Total
    units of output Total units of output = 100,000 units
    Depreciation expense for the year ended June 30, 2020: Depreciation expense 2020 =
    Depreciation per unit * Units produced in 2020 = (Rs 283,500/- - Rs 30,000/-) / 100,000 *
    1,800 = Rs 3,183/-

    Depreciation expense for the year ended June 30, 2021: Depreciation expense 2021 =
    Depreciation per unit * Units produced in 2021 = (Rs 283,500/- - Rs 30,000/-) / 100,000 *
    3,500 = Rs 6,231/-

    Depreciation expense for the year ended June 30, 2022: Depreciation expense 2022 =
    Depreciation per unit * Units produced in 2022 = (Rs 283,500/- - Rs 30,000/-) / 100,000 *
    5,400 = Rs 9,

    Irfan Ali (13825)

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