Question

A firm purchased machinery for \( \₹ 2,00,000 \) on 1st April 2025. Depreciation is charged at \(10%\) p.a. by Written Down Value Method. The depreciation for the first year will be:

• A. \( \₹ 10,000 \)
• B. \( \₹ 20,000 \)
• C. \( \₹ 25,000 \)
• D. \( \₹ 15,000 \)

Hint:

Under WDV Method, depreciation every year is calculated on reduced book value and not on original cost.

Answer 1

The Correct Option is B

Concept: Under the Written Down Value (WDV) Method, depreciation is calculated on the book value of the asset each year. \[ \text{Depreciation} = \frac{R \times V}{100} \] where \(R\) is rate of depreciation and \(V\) is value of asset.

Step 1: Substitute the values into the formula.
\[ \text{Depreciation} = \frac{10 \times 2,00,000}{100} \] \[ = 20,000 \] Hence, depreciation for the first year is: \[ \boxed{\₹ 20,000} \]