Question

. A fixed asset is purchased for Rs.1 lac with

excepted useful life of 5 years. Its depreciated
value at the end of 3rd year will be Rs.
If it is sold for Rs.45000, the firm will make
profit/loss of Rs.

Answer 1

The profit or loss on selling a fixed asset will be

Explanation:

We know that,

Depreciation = Original value - Scrap value / Estimated life of an asset

-> 100,000 - 0/ 5

= Rs 20,000 for every year

for 3 years,

Depreciation= 3 * 20,000 = Rs 60,000

The value of the asset after 3 years of depreciation = 100,000- 60,000

=Rs 40,000 ---(1)

If it is sold for Rs 45,000 ---(2)

Profit = (2) - (1)

= 45,000-40000

= Rs 5,000