trader purchased machinery on 1.1.02 for ` 50000. 1.7.03 he purchased additional machinery for ` 10000. A part of the machinery which was purchased on 1.1.02 costing ` 10000 was sold for ` 5000 on 30th June 2005. Prepare machinery a/c for 4 years, if the depreciation is provided @ 10% p.a. by straight line method. Books are closed on 31st December every year.
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40000 10000 10000
-4000 -1000 -500
=36000 =9000 =9500
-4000 -1000 -1000
=32000 =8000 =8500
-4000 -1000 -1000
=28000 =7000 =7500
-4000 -500 -1000
=24000 =6500 =6500
machinery purchased on 1.1.02 and sold on 30.6.2005
book value = 6500 sale value=5000
book value is greater than sale value. hence the difference amount is loss
loss= book value- sale value
=6500-5000
=1500
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