Question

original cost of machinery on 1 jan 1990 rs 80000,rate of depreciation=5%,date of sale of machinery 1july1992,sale value of machinery rs 50000 calculate loss on sale of machinery under straight line method​

Answer 1

Answer:

Cost of machinery = 80000( 1.1.1990)

(-) depreciation = 4000 (80000*5/100)

value on 1.1.1991. = 76000

(-) depreciation = 4000

value on 1.1.1992 = 72000

(-) depreciation = 2000

( for 6 months) = 70000

book value of machinery on 1.7.1992= 70000

Selling price of machinery = 50000

loss on sale of machinery = 70000-50000= 20000