Understanding Sofa Set Depreciation Calculation

This question involves calculating the scrap value of an asset, specifically a sofa set, using the straight-line depreciation method. The straight-line method is a common accounting technique used to spread the cost of a tangible asset over its useful life.

Key Information Provided

To solve this problem, we need to identify the given values:

• Cost of the sofa set (Asset Cost): ₹36000
• Useful life of the sofa set: 10 years
• Annual depreciation amount: ₹3000

The Straight-Line Depreciation Method

The straight-line method assumes that an asset depreciates by the same amount each year. The formula for annual depreciation is:

$ \text{Annual Depreciation} = \frac{\text{Cost of Asset} - \text{Scrap Value}}{\text{Useful Life}} $

We are given the annual depreciation and need to find the scrap value.

Formula for Scrap Value

We can rearrange the depreciation formula to solve for the scrap value:

$ \text{Scrap Value} = \text{Cost of Asset} - (\text{Annual Depreciation} \times \text{Useful Life}) $

Step-by-Step Calculation

Now, let's plug the given values into the rearranged formula:

1. Identify the Cost of the Asset: ₹36000
2. Identify the Annual Depreciation: ₹3000
3. Identify the Useful Life: 10 years
4. Calculate the total depreciation over the useful life:

$ \text{Total Depreciation} = \text{Annual Depreciation} \times \text{Useful Life} $

$ \text{Total Depreciation} = ₹3000 \times 10 $

$ \text{Total Depreciation} = ₹30000 $

5. Calculate the Scrap Value using the formula:

$ \text{Scrap Value} = \text{Cost of Asset} - \text{Total Depreciation} $

$ \text{Scrap Value} = ₹36000 - ₹30000 $

$ \text{Scrap Value} = ₹6000 $

Conclusion: Determining Sofa Set Scrap Value

Based on the calculation using the straight-line depreciation method, the scrap value of the sofa set is ₹6000. This matches one of the provided options.