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Sunrise Ltd. purchased a second-hand mac...

Sunrise Ltd. purchased a second-hand machine for Rs 5,50,000 and spent Rs 50,000 on its repairs. Depreciation is to be provided `"@" 10%` p.a. following Straight Line Method. The machine is sold for Rs 4,40,000. Accounting year is financial year. Calculate the gain (profit) or loss on sale of the machine in cach of the following altcrnutive cases:
Case 1 : If date of purchase is 1st April, 2015 and date of sale is 31st March, 2018.
Case 2 : If date of purchase is 1st April, 2016 and date of sale is 30th September, 2018.
Case 3 : If date of purchase is 1st July, 2015 and date of sale is 31st March, 2018.
Case 4 : If date of purchase is 1st July, 2016 and date of sale is 30th September, 2018.

Text Solution

Verified by Experts

Total Cost of Asset (in all cases) = Rs 5,50,000 + Rs 50,000 = Rs 6,00,000
Yearly Depreciation `= Rs 6,00,000 xx 10//100 = Rs 60,000 `
STATEMENT SHOWING THE CALCULATION OF PROFIT/LOSS ON SALE OF THE MACHINE ltBRgt
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