Mathematics · Financial Accounting
'Solaris Power Infra' constructed a solar farm commissioned on January 1, 2023, at a total capitalized cost of 50,00,00,000 units. The estimated life of the panels is 20 years with a 5% salvage value. The company uses the Straight Line Method (SLM). On January 1, 2025, due to a severe hailstorm, 20% of the panels were destroyed. The insurance company admitted a claim for 6,00,00,000 units. Additionally, the company decided to switch from SLM to the Written Down Value (WDV) method at 10% for the remaining 80% of the panels, whose remaining useful life was reduced to 12 years from January 2025. What is the loss on the destroyed panels to be recognized in the 2024-25 Profit and Loss account, and what is the new depreciation for the surviving panels for the first quarter of 2025 (January to March)?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Loss of 4,00,00,000 units and Depreciation of 1,10,00,000 units
- 2Loss of 3,05,00,000 units and Depreciation of 90,50,000 units✓
- 3Loss of 2,75,00,000 units and Depreciation of 94,43,750 units
- 4Loss of 3,50,00,000 units and Depreciation of 1,00,00,000 units
Correct answer
Loss of 3,05,00,000 units and Depreciation of 90,50,000 units
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