Question

Question 22.
X bought a machine for ₹ 25,000 on which he spent ₹ 5,000 for carriage and freight. ₹ 1,000 for brokerage of the middleman, ₹ 3,500 for installation and ₹ 500 for an iron pad. The machine is depreciated @ 10% every year on Written Down Value basis. After three years, the machine was sold to Y for ₹ 30,500 and ₹ 500 was paid as commission to the broker through whom the sale was effected. Find out the profit and loss on sale of machine.

Answer 1

Answer:

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Answer 2

X bought a machine for ₹ 25,000 on which he spent ₹ 5,000...

1. The total amount spend to for the installation of the machine is 25000+5000+1000+3500+500= Rs.35000
2. Now since only the machine's value depreciates, the machine's value after 3 years is to be calculated.
3. This is similar to compound interest.
4. 25000(0.9)^3= 18225
5. Now 18225+the additional cost(5000+1000+3500+500) will give the total current value. This is 28225.
6. 31000-28225=2775 Profit