Depreciation by straight line method: Class 11 practice
Straight line method charges the same depreciation every year: (cost − residual value) ÷ useful life. Read the method, follow the three worked examples, then try the six questions.
What you should know first
- Percentages
The idea behind depreciation by straight line method
Straight line method charges the same depreciation every year: (cost − residual value) ÷ useful life. Book value falls by that amount each year.
Step-by-step method
- Cost includes purchase price plus installation/freight.
- Annual depreciation = (cost − scrap) ÷ life.
- Book value after n years = cost − n × depreciation.
Worked example 1 (Basic)
A machine costs ₹3,60,000 plus ₹1,000 installation, life 9 years, scrap ₹8,000. Find the annual depreciation (SLM).
- Depreciable amount = ₹3,61,000 − ₹8,000 = ₹3,53,000
- Annual depreciation = ₹39,222
- Answer: ₹39,222
Worked example 2 (Standard)
A machine costs ₹3,50,000 plus ₹2,000 installation, life 7 years, scrap ₹0. Find the annual depreciation and the book value after 3 years (SLM).
- Depreciable amount = ₹3,52,000 − ₹0 = ₹3,52,000
- Annual depreciation = ₹50,286
- Book value = ₹2,01,143
- Answer: ₹50,286; ₹2,01,143
Worked example 3 (Challenge)
A machine costing 4000 installation plus ₹90,000 (life 5 yrs, scrap ₹10,000) is sold after 3 years for ₹47,960. Find the profit or loss on sale (SLM).
- Depreciation = ₹16,800 a year
- Book value = ₹94,000 − 3 × ₹16,800 = ₹43,600
- Profit = ₹4,360
- Answer: Profit ₹4,360
Common mistakes and misconceptions
- Leaving installation out of cost
- Depreciating below scrap value
Practice questions
- (Basic) A machine costs ₹1,00,000 plus ₹2,000 installation, life 9 years, scrap ₹2,000. Find the annual depreciation (SLM).
- (Basic) A machine costs ₹1,80,000, life 10 years, scrap ₹2,000. Find the annual depreciation (SLM).
- (Standard) A machine costs ₹4,80,000 plus ₹2,000 installation, life 4 years, scrap ₹6,000. Find the annual depreciation and the book value after 3 years (SLM).
- (Standard) A machine costs ₹3,90,000, life 7 years, scrap ₹2,000. Find the annual depreciation and the book value after 3 years (SLM).
- (Challenge) A machine costing 4000 installation plus ₹50,000 (life 9 yrs, scrap ₹0) is sold after 8 years for ₹6,720. Find the profit or loss on sale (SLM).
- (Challenge) A machine costing 4000 installation plus ₹1,90,000 (life 9 yrs, scrap ₹4,000) is sold after 8 years for ₹27,371. Find the profit or loss on sale (SLM).
Answer key with full working
- Q1: Depreciable amount = ₹1,02,000 − ₹2,000 = ₹1,00,000 → Annual depreciation = ₹11,111 → Answer: ₹11,111
- Q2: Depreciable amount = ₹1,80,000 − ₹2,000 = ₹1,78,000 → Annual depreciation = ₹17,800 → Answer: ₹17,800
- Q3: Depreciable amount = ₹4,82,000 − ₹6,000 = ₹4,76,000 → Annual depreciation = ₹1,19,000 → Book value = ₹1,25,000 → Answer: ₹1,19,000; ₹1,25,000
- Q4: Depreciable amount = ₹3,90,000 − ₹2,000 = ₹3,88,000 → Annual depreciation = ₹55,429 → Book value = ₹2,23,714 → Answer: ₹55,429; ₹2,23,714
- Q5: Depreciation = ₹6,000 a year → Book value = ₹54,000 − 8 × ₹6,000 = ₹6,000 → Profit = ₹720 → Answer: Profit ₹720
- Q6: Depreciation = ₹21,111 a year → Book value = ₹1,94,000 − 8 × ₹21,111 = ₹25,111 → Profit = ₹2,260 → Answer: Profit ₹2,260
Syllabus note
This skill is listed under "Depreciation" for Class 11 in the NCERT/CBSE books. ICSE, IGCSE, IB and state boards may teach it in a different chapter or year.
Answers on this page are generated and automatically re-checked by a second, independent calculation. They have not been reviewed by a teacher — if you spot a problem, tell us on WhatsApp.
Related practice and notes
Frequently asked questions
Which chapter is depreciation by straight line method in?
"Depreciation", Class 11 Accountancy (NCERT/CBSE). Other boards may place it differently.
How were the answers checked?
Answers on this page are generated and automatically re-checked by a second, independent calculation. They have not been reviewed by a teacher — if you spot a problem, tell us on WhatsApp.