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LAKSHAY CHAHAL

· started a discussion

· 1 Months ago

Depreciation is related to Scrap Value (not salvage value) (Question: 138509.0 )

Annual Dep. = Org. Cost - Scrap Val /life of st.

Question:
Annual depreciation is given as:


Options:
A)

\(\cfrac{Salvage\ value\ — Scrap\ value}{Useful\ life\ of\ equipment\ in\ years}\).

B) \(\cfrac{Initial\ — Scrap\ value}{Useful\ life\ of\ equipment\ in\ years}\)
C) \(\cfrac{Initial\ value\ — Salvage\ value}{Useful\ life\ of\ equipment\ in\ years}\)
D) \(\cfrac{Salvage\ value}{Useful\ life\ of\ equipment\ in\ years}\)
Solution:
Ans: (c) \(\cfrac{Initial\ value\ — Salvage\ value}{Useful\ life\ of\ equipment\ in\ years}\)

Knowledge Expert

· commented

· 1 Months ago

Dear student
Given answer is correct
Annual Depreciation expense = (Asset cost – Residual Value) / Useful life of the asset

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