Question

On 1^st April, 2022 S. Ltd. purchased a Truck costing Rs. 16,00,000. Depreciation was to be charged @ 12% p.a. by written down value method. What will be the book value of the Truck on 31^st March 2023?

• A. Rs. 14,08,000
• B. Rs. 12,00,000
• C. Rs. 15,00,000
• D. Rs. 8,00,000

Hint:

The Written Down Value method applies depreciation on the remaining book value each year, resulting in a decreasing depreciation amount over time.

Answer 1

The Correct Option is A

Depreciation under the Written Down Value (WDV) method is calculated as:

\[ \text{Depreciation} = \text{Cost} \times \text{Rate of Depreciation} \]

Given: Cost = Rs. 16,00,000, Rate = 12%

\[ \text{Depreciation} = 16,00,000 \times \frac{12}{100} = \text{Rs. } 1,92,000 \]

The book value after one year:

\[ \text{Book Value} = \text{Cost} - \text{Depreciation} \]

\[ \textbf{Book Value} = 16,00,000 - 1,92,000 = \text{Rs. } 14,08,000 \]