manufacturing company sold a machinery for Rs 8 lacs at the year end. The company had purchased the machinery four years back for Rs 15 lacs and had depreciated the same using written down value method of depreciation @ 20%. As an accounts executive of Wildcat Ltd, calculate the WDV of the asset for the four years, accumulated depreciation for four years and profit/loss on sale, if any.
Answers
Answered by
0
The company has purchased the machinery four years back for Rs 15,00,000
Cost of machinery = 15,00,000
Depreciation for 1st year :
15,00,000 × 20 ÷ 100 = 3,00,000
Depreciation for 2nd year:
(15,00,000 - 3,00,000) × 20 ÷ 100 = 2,40,000
Depreciation for 3rd year:
(15,00,000 - 3,00,000 - 2,40,000) =
9,60,000 × 20 ÷ 100 = 1,92,000
Depreciation for 4th year:
(15,00,000 - 3,00,000 - 2,40,000 - 1,92,000) =
7,68,000 × 20 ÷ 100 = 1,53,600
Cost of machine after dep. = 6,14,400
Profit on sale = 8,00,000 - 6,14,400
= 1,85,600
Similar questions