GATE 2021 CE (CE2) – Question 53

Construction Management · Types of construction projects, estimation and costing, analysis of rates · 2 marks · Numerical answer

Equipment costs ₹160000, salvage value ₹10000 and estimated life 5 years. Find difference between book values at end of year 4 using straight-line and sum-of-years-digits depreciation (integer rupees).

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Correct answer: 20000 to 20000

Explanation

Depreciable amount is ₹150000. Straight-line annual depreciation is ₹30000, leaving book value ₹40000 after four years. Sum-of-years denominator is 15; the remaining final-year fraction is 1/15, leaving ₹10000+₹150000/15=₹20000. The difference is **₹20000**.