Question

Question 6.
An asset was purchased for ₹ 10,500 on 1st April, 2011. The scrap value was estimated to to be ₹ 500 at the end of asset’s 10 years life. Straight Line Method of depreciation was used. The accounting year ends on 31st March every year. The asset was sold for ₹ 600 on 31st March, 2018. Calculate the following.
(i) The Depreciation expense for the year ended 31st March, 2012.
(ii) The net book value of the asset on 31st March, 2016.
(iii) The grain or loss on sale of the asset on 31st March, 2018.

Answer 1

1. Depreciation expense amounts to Rs1,000

2. Net book value of assets amounts to Rs5,500

3. Loss on sale of assets amounts to Rs 2,900

Explanation:

The assets account is shown below:

Answer 2

The complete responses to the given question can be defined as follows:

Explanation:

Please find the table in the attached file.

For point (i) the answer is "Rs. 1000".

For point (ii) the answer is "Rs. 5,500".

For point (iii) the answer is "Rs. 2,900".