Question

In the books of Vandana Ltd. the machinery account shows a debit balance of Rs.48,000 as on April 1,2013.the original cost of which was Rs.75,000. The Machinery was sold on September 30, 2015 for Rs.42,000. The company charges depreciation @20% p.a. on Straight line Method. The depreciation for 2013-2014 is​

Answer 1

Explanation:

Calculation of Profit and loss on sale of machinery in the books of D Ltd.

Book value of machinery as on April 1, 2003                       Rs. 60000

Less : Depreciation @20 % p.a                                              Rs.(12000)

(April 1, 2003 - March 31,2004)   

Written down value of machinery on April 1, 2004               Rs. 48000

Less: Depreciation @20 % p.a for 6 months                          Rs. (4800)

(April 1, 2004 - sept. 30, 20004)

Written down value of machinery on Sept. 30, 2004           Rs. 43200

Less : Sales value of machinery                                              Rs. (20000)

(Profit)/ Loss on sale of machinery                                          Rs. 23200