Question

How to calculate profit and loss account in depreciation with an example?

Answer 1

Method of Calculating profit or loss 8n depreciation:-

(1). If BOOK VALUE is greater than SALE'S VALUE of asset then there is a LOSS.
and (LOSS = BOOK VALUE - SALES VALUE)


(2). and if BOOK VALUE is less than SALE'S VALUE of asset then there is a PROFIT.
and (PROFIT = SALES VALUE - BOOK VALUE)

Answer 2

Determine the expected lifespan of the asset. ...

Divide 100% by the number of years in the asset life and then multiply by 2 to find the depreciation rate. ...

Determine the asset's purchase price. ...

Multiply the current value of the asset by the depreciation rate.