Question 21. Pronto Pack Ltd sells its old packaging machine for Rs 300 on 31 December 2005. The machine was bought during the year ended 31 December 2000 for Rs 10,000. Depreciation on plant and machinery is charged at 20% on a straight-line basis. The gain on disposal is:

Question 22. Amit ltd purchased a machine on 01.01.2013 for Rs 120000. Installation expenses were Rs 10,000. Residual value after 5 years is Rs 5000. Rate of dep is 10% on WDV basis. Depreciation for 4th year = ………..

Question 23. Bank purchased a computer on 1.03.2015 at a cost Rs. 50000, estimated life is 8 years, cost of depreciation under straight-line method will be:

Question 24. If a firm is using ______ method, the amount of depreciation is initially lower while if the method of depreciation is _____, the amount of depreciation is initially higher.

Question 25. The annual depreciation charge in ________ remains fixed during the life of the asset. In contrast, the amount of depreciation in ______ method diminishes every year.

Question 26. The only vehicle owned by a company is reported at its cost of Rs60,000 in the Motor Vehicle account, while the depreciation on the vehicle written off in each of the three years of use is reported in an Accumulated depreciation account at Rs36,000. Which of the following statements is incorrect regarding when the whole of Rs36,000 need to be transferred away from the Accumulated depreciation account.

Question 27. A fixed asset costing Rs 12,000 was sold for Rs 5,000. At the date of disposal, it's net book value is Rs2,000. What is the profit or loss on disposal of this fixed asset?

Question 28. A motor van was bought for Rs20,000 on 1 September 2005 with a residual value of Rs2,000. Depreciation was charged at 20% by the reducing balance method on yearly basis. It was sold for Rs18,000 after three years of use on 30 September 2008. Compute the profit on sale of asset.

Question 29. Which among the following is false about Diminishing balance method-

Question 30. ABC Company provides the following information:
Cost of the equipment: Rs5,000
Salvage value: Rs500
Useful life of equipment: 10 years
Under straight line method, the yearly depreciation charge is: