Fixed assets $100000, Depreciation rate 10% what is carrying value after 2 year?

The answer is D.The two popular methods to deal with depreciation are: (1) Original cost method and, (2) Diminishing balance method. It is up to the accountant to follow the method he deems appropriate.  I have proven here through both methods.(1) - Original Cost Method: According to this method the asset is depreciated with a fixed percentage/amount, calculated on the original cost of the asset, in every financial year. Given here are, Fixed assets = $100,000. Depreciation rate =10%. So, The amount of depreciation for a financial year would be the depreciation rate * cost of fixed assets.The amount of depreciation for a financial year would be10% of $100,000 = $10,000. If we charge $10000 for two financial years of fixed assets of worth $100,000 the balance or the carrying value would be,The carrying value for the first financial year = Fixed assets - Depreciation. The carrying value for the first financial year = $100,000 - $10,000 =  $90,000. The carrying value for the second financial year = $90,000 - $10,000 = $80,000. So, while calculating the depreciation through the original cost method the carrying value of the fixed assets of worth $100,000 after two years would be $80,000.

(2) Diminishing balance Method: According to this method each year depreciation amount is calculated on the debit balance of the asset.So,Carrying value of the fixed assets for the first financial year would be the = cost of fixed asset -  depreciation value. So, the carrying value for the first financial year = $100,000 - (10% of $100,000) =90,000. The depreciation for the second year has to be calculated on debit balance, therefore, the carrying value  for the second year = debit balance - depreciation on debit balance. So carrying value = $90,000 - (10% of90,000) = $81000.Hence, the answer to your question is D: Not from the above options

100000- zero =100000 

 100000*10% =10000 per year 

after two year accumulated depreciation is20000

so carrying cost will be = =80000

so correct answer is D 

 

I go with the answer given by Sara Fatima.........................

Option D as method of depreciation is not mentioned in question

option D,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

 There is no possibility of Option A, B & C. Option -D is correct.

D, Not from above options. 

As per straight line method =100,000 *10/100 =10,000 / month which means every year10,000 depreciation will be charged.1st year:100,000-10,000 =90,0002nd year90,000-10,000=80,000. This shows that the carrying value after2 years will be80,000 which is not in the options. 

As per diminishing method:100,000*10/100 =10,000

1st year :100,000-10,000 =90,000

2nd year :90,000 *10/100 =9000

=81,000

this is also not in the option.

Option D is the right answer. You should mention the method of depreciation for calculating the carrying value.

D But is that a waste of time question or test your QI ??Fixed assets $100000, Depreciation rate10% what is carrying value after2 year?

Answer is D (not from above options)

Answer is D - If depreciation is on Straight Line Method then carrying value after2 years would be $80000, if Depreciation on Reducing Balance Method then carrying value after2 years would be $81000