A second hand car was purchased for Rs. 2, 00,000 and depreciation is
Right Answer is: B
• Under Written down Value (WDV) method, depreciation is charged on the book value of the asset & book value is decreased each year by the depreciation.
• Here, under given situation, Book value of second hand car was
= Rs. 2, 00,000, Rate of depreciation= 10%.
• Value of car after one year =2,00,000*90%=1,80,000
• Value of car after two year=1,80,000*90%=1,62,000
• Profit/loss= Selling price-value of asset=1,40,000-1,62,000