An asset was purchased for Rs 10,500 on 1st April, 2012. The scrap value was estimated to be Rs 500 at the end of asset's 10 years' life. Straight Line Method of depreciation was used. The accounting year ends on 31st March every year. The asset was sold for Rs 600 on 31st March, 2019. Calculate the following:
(i) The Depreciation expense for the year ended 31st March, 2013.
(ii) The net book value of the asset on 31st March, 2017.
(iii) The gain or loss on sale of the asset on 31st March, 2019.

Answer

[Depreciation for 2012-13- Rs 1,000; Net Book Value on 31st March, 2017- Rs 5,500; Loss on Sale of Asset on 31st March, 2019- Rs 2,900,]

Explanation

Loss on Sale of Asset on 31st March, 2019, Rs 10,500 (Original Cost) - Rs 7,000 (Total Depreciation for 7 years)- Rs 600(Sale Price) = Rs 2,900.