Question

A company purchased a machinery for Rs. 25,000 on 1st January, 2013. The machinery is depreciated at 10% p.a. on the written down value. On 1st July, 2015, the machinery was sold for Rs. 13,750. Make a Machinery A/C for year 2013-2014 to 2014-2015.​

Answer 1

Explanation:

NOTE :

Depreciation for the last year

written down value × rate of dep × months used

20250 × 10% × 3/12

=506.25

Calculation of profit or loss on sale of machinery

written down value as on 1/4/2015 = 20250

Less: Depreciation for 3 months = 506.25

written down value as on 1/7/2015 = 19743.75

Less: sale value =13,750

LOSS = 5993.75