Question

An asset was purchased for ₹ 10,500 on 1st April, 2012. The scrap value was estimated to to be ₹ 500 at the end of asset's 10 years' life. Straight Line Method of depreciation was used. The accounting year ends on 31st March every year. The asset was sold for ₹ 600 on 31st March, 2019. Calculate the following.
(i) The Depreciation expense for the year ended 31st March, 2013.
(ii) The net book value of the asset on 31st March, 2017.
(iii) The gain or loss on sale of the asset on 31st March, 2019.

Answer 1

Asset Account
Dr.									Cr.
Date		Particulars	J.F.	Amount (₹)	Date	Particulars	J.F.	Amount (₹)
2012					2013
April 01		Bank		10,500	Mar.31	Depreciation		1,000
					Mar.31	Balance c/d		9,500
				10,500				10,500
2013					2014
April 01		Balance b/d		9,500	Mar.31	Depreciation		1,000
					Mar.31	Balance c/d		8,500
				9,500				9,500
2014					2015
April 01		Balance b/d		8,500	Mar.31	Depreciation		1,000
					Mar.31	Balance c/d		7,500
				8,500				8,500
2015					2016
April 01		Balance b/d		7,500	Mar.31	Depreciation		1,000
					Mar.31	Balance c/d		6,500
				7,500				7,500
2016					2017
April 01		Balance b/d		6,500	Mar.31	Depreciation		1,000
					Mar.31	Balance c/d		5,500
				6,500				6,500
2017					2018
April 01		Balance b/d		5,500	Mar.31	Depreciation		1,000
					Mar.31	Balance c/d		4,500
				5,500				5,500
2018					2019
April 01		Balance b/d		4,500	Mar.31	Depreciation		1,000
					Mar.31	Bank		600
					Mar.31	Profit and Loss (Loss)		2,900
				4,500				4,500

(i) Depreciation Expense for the year ended March 31, 2013 is Rs 1000

(ii) The Net Book Value of the asset on March 31, 2017 is Rs 5,500

(iii) Loss on Sale of the asset on March 31, 2019 is Rs 2,900