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Equipment purchase cost Rs. 4000 Scrap Value Rs. 400 Use Full life 5 years. What is book value of equipment after 2 years?

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Question added by Waqar khan , Audit Associate , PwC
Date Posted: 2015/07/23
Mohammed Asim Nehal
by Mohammed Asim Nehal , M Asim Nehal & Co , Chartered Accountants

Correct answer is2560  ....................d) None of the above....

4000-400 =3600    3600/5 =720    720 x2 =1440       =2560

Shahbaz Hayder
by Shahbaz Hayder , Group Head of Finance , Sharif Group of Companies

Option D is the right answer.

Zehab Osman
by Zehab Osman , Accountant , Aldar Consultancy Co.

D-------------------------------------------------

Abd ElRahman Mohammed Idris Mohammed
by Abd ElRahman Mohammed Idris Mohammed , Internal Audit Manager , Kenana Sugar Company Limited

D) None of above.

Annual Depreciation =4000 -400  =3600 /5 =720

Depreciation for2 years =720*2 =1440

Book value after2  years =4000 -1440 =2560

Therefore the correct answer is (D)

mehfooz alam khan habib khan
by mehfooz alam khan habib khan , Security Incharge , Landmark Group (Emax)

Option D is right answer. Cost4000 - scrap value400 =3600 life time5 years,3600/5 =720. Book value aftee two years are4000 -1440 =2560

Ayad ليالي
by Ayad ليالي , Audit Manager of Finance , El-Hassan & El-Hussein Manufacturing Food & Commercial

 , D.none of above.4000-400=3600/5=720*2=1440.=2160

Michael Lagunday
by Michael Lagunday , Accounts Assistant , Invest Group Overseas LLC

The question is silent about the depreciation method to be used. 

It is also silent of what type of equipment it is.

Commonly, straight line method is used so the answer is D. None of the above.

[(4000-400)/5]*3+400=2560

Malik Saleem Iqbal
by Malik Saleem Iqbal , Assistant Finance Manager , Ali Zaid Al-Quraishi & Brothers Co LTD

Answer is "D"

None of above

Mohammed Sharif-uzzaman Khan
by Mohammed Sharif-uzzaman Khan , Head of Finance & Internal Control , Desh Television Ltd.

Option "D" is the right answer

Saidul Alam
by Saidul Alam , Accountant , Akhtar Al Balushi Trad. & Cont. L.L.C

None of above.............................

Mohd Asim
by Mohd Asim , Senior, Assurance , Ernst & Young

Option D is the correct answer as all the other are incorrect