Question: Mr. R bought a machine for Rs 25,000 on which he spent Rs 5,000 for carriage and freight; Rs 1,000 for brokerage of the middleman; Rs 3,500 for installation and Rs 500 for an iron pad. The machine is depreciated @ 10% every year on a written down basis. After three years the machine was sold to Mr. B for Rs 30,500 and Rs 500 was paid as commission to the broker. Find out the profit or loss on the sale of the machine.
Question: Mr. R bought a machine for Rs 25,000 on which he spent Rs 5,000 for carriage and freight; Rs 1,000 for brokerage of the middleman; Rs 3,500 for installation and Rs 500 for an iron pad. The machine is depreciated @ 10% every year on a written down basis. After three years the machine was sold to Mr. B for Rs 30,500 and Rs 500 was paid as commission to the broker. Find out the profit or loss on the sale of the machine.
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 58P
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Transcribed Image Text:Question:
Mr. R bought a machine for Rs 25,000 on which he spent Rs 5,000
for carriage and freight; Rs 1,000 for brokerage of the middleman;
Rs 3,500 for installation and Rs 500 for an iron pad. The machine
is depreciated @ 10% every year on a written down basis. After
three years the machine was sold to Mr. B for Rs 30,500 and Rs
500 was paid as commission to the broker. Find out the profit or
loss on the sale of the machine.
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