suppose a company traded in an old machine having a carrying amount of Rs.16800 and cash difference of Rs. 6000 for a new machine having total cash price of Rs. 20500.so my question is what would be the cost price of new machine? whether it will be Rs.20500 or Rs.14500(Rs20500-Rs.6000)?
21 May 2009
By looking ur case, W.D.V. of old machine is Rs.16800/- and sold for (20500-6000)=Rs.14500/-and with it Rs. 14,500( selling price as mutually agreed)+ Rs.6000/- in cash is paid for new machine. So cost of new machine should be Rs. 14,500+Rs. 6,000/-= Rs. 20,500/- and loss on sale of old machine will be 16800-14500=Rs.2,300/-
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