Devinder had among other assets, machinery at a gross value of Rs 5,00,000 on which accumulated depreciation amounted to Rs 2,00,000. A machine purchased for Rs 2,00,000 having accumulated depreciation amounted to Rs 80,000 was sold during the year for Rs 1,35,000. You are required to determine the profit or loss on the machine sold sold by preparing the Asset Disposal Account.

Explanation