Multiple choice

A machine costing Rs. 10,00,000 was purchased on 1 July, 2008. It is to be depreciated @12.5% P.A. under diminishing balance method. The machine was sold on 31 March, 2010 for Rs. 7,00,000. Find out the profit or loss on sale of machine.

  1. Rs. 50,000 profit

  2. Rs. 50,000 loss

  3. Rs. 65,625 profit

  4. Rs. 92,969 loss
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Cost of Machine            =                                  Rs. 10, 00, 000 Less: Depreciation for 08-09 ( for 9 months)      = Rs.     93,  750                          W.D.V.             =                       Rs.  9, 06, 250 Less: Depreciation for 09-10      =                        Rs. 1, 13, 281                         W.D.V.              =                       Rs. 7, 92, 969                         S.P.                 =                        Rs. 7, 00, 000 Thus, Loss = Rs.92,969

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