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SSC Financial and Cost Accounting P-1 QUESTION #9633
Question 1
An asset purchased for Rs. 150,000 with an estimated life of 10 years is depreciated on the straight-line method. After Year 2, it is classified as 'Written Down Value'. What is the Written Down Value at the end of Year 2, and what is the annual depreciation charge?
  • WDV = Rs. 130,000; Annual depreciation = Rs. 15,000
  • WDV = Rs. 120,000; Annual depreciation = Rs. 15,000✔️
  • WDV = Rs. 135,000; Annual depreciation = Rs. 7,500
  • WDV = Rs. 120,000; Annual depreciation = Rs. 30,000
Correct Answer Explanation
Annual depreciation (SLM) = Cost ÷ Estimated life = 150,000 ÷ 10 = Rs. 15,000. Accumulated depreciation after Year 2 = 15,000 × 2 = Rs. 30,000. Written Down Value = Cost – Accumulated Depreciation = 150,000 – 30,000 = Rs. 120,000.