Question
Q6. a) The useful life is 5 years, salvage value INR 10,000 and the cost is INR 50,000 and total production capacity is 5000 units.
Q6. a) The useful life is 5 years, salvage value INR 10,000 and the cost is INR 50,000 and total production capacity is 5000 units. The production is 1000 units in the first year, 800 units in the second year and 1200 units in the third year, 1100 units in the fourth year and 900 units in the fifth year. Calculate depreciation using SLM and units of production method and explain the difference between the depreciation amount between two methods. b) If the company wants to save taxes in the first three years, which method of depreciation should be used.
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