A machine was bought on 1^st January, 1994 for Rs. 10,000. Its working life was estimated to be four years. The method of depreciation used is the 'sum of the year digit'. The machine was discarded and sold on 30^th June, 1996 for Rs. 1,000. The profit/loss on sale of the discarded machine was:

A) Rs. 1,120 loss B) Rs. 2,250 loss C) Rs. 1,500 loss D) Rs. 1,000 loss

Answer & Solution

Correct Answer: Option D

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Bipul Ahmed 2 years ago

{4-(1-1)}/10*10000=4000
{4-(2-1)}/*10000=3000
{4-(3-1)}*10000=2000/2=1000 ( Due to 6 month)
Accm. Depreciation =4000+3000+1000=8000
Boook value=10000-8000=2000
so loss =2000-1000=1000 Ans

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A machine was bought on 1st January 1994 for Rs 10...

A machine was bought on 1st January, 1994 for Rs. 10,000. Its working life was estimated to be four years. The method of depreciation used is the 'sum of the year digit'. The machine was discarded and sold on 30th June, 1996 for Rs. 1,000. The profit/loss on sale of the discarded machine was:

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A machine was bought on 1^st January, 1994 for Rs. 10,000. Its working life was estimated to be four years. The method of depreciation used is the 'sum of the year digit'. The machine was discarded and sold on 30^th June, 1996 for Rs. 1,000. The profit/loss on sale of the discarded machine was: