Accounting · Depreciation Accounting
On April 1, 2022, a bank purchased a server cluster for 1,20,00,000 (estimated life 4 years, residual value 20,00,000, using Straight Line Method). On April 1, 2024, due to technological obsolescence, the remaining useful life is revised to only 1 more year (ending March 31, 2025) and the residual value is estimated at 5,00,000. What is the correct depreciation charge for FY 2024-25?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1The bank should write off the entire remaining book value of 70,00,000 immediately.
- 2Treating this as a change in accounting estimate, the new depreciation for FY 2024-25 is 65,00,000.✓
- 3The bank must retrospectively adjust the previous years' depreciation by 15,00,000.
- 4The bank should continue the original depreciation of 25,00,000.
Correct answer
Treating this as a change in accounting estimate, the new depreciation for FY 2024-25 is 65,00,000.
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Accounting?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Depreciation Accounting MCQs →Want more practice questions on Depreciation Accounting?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Accounting · Depreciation Accounting