SOLVE Question:Mr. R bought a machine for Rs 25,000 on which he spent Rs 5,000for carriage and freight; Rs 1,000 for brokerage of the middleman;Rs 3,500 for installation and Rs 500 for an iron pad. The machineis depreciated @ 10% every year on a written down basis. Afterthree years the machine was sold to Mr. B for Rs 30,500 and Rs500 was paid as commission to the broker. Find out the profit orloss on the sale of the machine.

Explanation of Cost of the Machine:The cost of the machine refers to the total expenditure incurred…

Answered: Question: Mr. R bought a machine for Rs…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 58P

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Mr. A 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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Bruno buys two motor vans costing RM41,000 in total. They are depreciated on the reducing-balance basis at the rate of 40% per annum. Which of the following statements is true? A. The NBV of the vans after two years will be RM14,760 and the depreciation charge for year 2 will be RM9,840 B. The NBV of the vans after one year will be RM14,760 and the depreciation charge for year 2 will be RM16,400. C. The NBV of the vans after two years will be RM24,600 and the depreciation charge for year 2 will be RM9,840 D. The NBV of the vans after one year will be RM24,600 and the depreciation charge for year 2 will be RM16,400.
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