08 January 2013
Manish Industry purchased a machinery worth Rs 50000 in 1st Jan 2004.They charged depriciation at 10% p.a on 31 Dec every year.On 1st OCT 2006 they sold the machinery at Rs 60000.Calculate the profit on sale of asset Calculate Depriciation as per WDV and SLM
09 January 2013
Since you have sold the asset in the same year using SLM or WDV method will not make any difference. Charge dep for 9 months @ 10% viz 50000*10%*9/12 = 3750. Dep A/c Dr 3750 To Asset A/c 3750
Now the value of your asset is 50000 - 3750 = 46250. Profit on sale of machinery = 60000-46250 = 13750.
Bank A/c Dr. 60000 To Profit on sale of Machinery Dr. 13750 To Asset A/c 46250
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