An office equipment is purchased on 1.1.12 for `1,10,000 having working life of 4 years at the end of which it is expected to have a scrap value of `10,000. Find the difference in depreciation as per Sum of years digit methods and reducing balance method (25% WDV) for the year ending on 31st December 12

Question

Quizplus · Accepted Answer

The depreciation for the first year using the Sum of Years Digit method is `40,000, while using the reducing balance method (25% WDV) is `27,500. The difference is `40,000 - `27,500 = `12,500, which is closest to `15,000.

An Office Equipment Is Purchased on 1