A machine purchased on 1st January 1999 for Rs. 10,000 has been sold on 30th
June, 2002 for Rs. 6,000. Calculate the profit or loss on sale of machine assuming 10%
depreciation per annum on straight line basis.
Can anyone answer fast....
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Answer:
book value on machinery as at 30th June 2002 = cost of assets - depreciation upto the date of sale
depreciation = from 1st jan 1999 to June 2002
means almost 3 years 6 months
depreciation = 10,000×10/100×42/12 = 3500
loss/profit = cost of asset after depreciation - sales price
= (10,000-3500) - 6,000
= 6500 - 6000
= 500
loss on sale of machinery = 500
42 months = 3 years --- 36 months + 6 months
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