1 A company purchased on 1st January 2003 a machine at a cost of Rs 65.000. On Est July
2003, the company purchased another machine costing Rs 32,500. On 1st July 2004 the
machine purchased on 1st January 2003 became obsolete and it was sold off for Rs. 25,000
On ist July 2005, a machine was purchased for Rs 78,000 and the machine on Is July 2003
was sold for Rs 27,300 on the same date (1.7.05) Depreciation under written down value at
10% pa was provided. Prepare Machinery. Disposal Ne, assuming that the accounts are
closed on 31st December every year
Answers
Explanation:
Profit/loss on Asset = Sale value of asset - WDV of asset
= 50000 - 1,50,000
= Loss of RS-1,00,000
Working notes:-
WDV of the asset as on 31.12.08
= Cost - depreciation for 7 years on SLM basis
= 5,00,000 - 3,50,000 ( 50,000 x 7years)
= RS-1,50,000
Depreciation on SLM basis = depreciable amount
------------------------------
useful life
= 5,00,000
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10
= RS-50,000.
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