purchased a machine of Rs. 1000000 on 1/1/13, the service life of the machine is 10 years. The company calculate depreciation on straight line basis, which is = cost of the asset/no.of years
To calculate the annual depreciation expense using the straight-line method, divide the cost of the asset by the number of years of its service life.
In this case, you purchased a machine for Rs. 1,000,000 on 1/1/13, and the service life of the machine is 10 years.
To calculate the annual depreciation, use the formula:
Depreciation Expense = Cost of the Asset / Number of Years
Depreciation Expense = Rs. 1,000,000 / 10 years
Depreciation Expense = Rs. 100,000 per year
So, the annual depreciation expense of the machine is Rs. 100,000.