You visited us 1 times! Enjoying our articles? Unlock Full Access!

Byju's Answer

Standard XI

Accountancy

Asset Disposal

An enterprise...

Question

An enterprise sells on 1 January 2005 a van which it bought on 1 January 2002 for Rs. 3,000, and has been depreciating the van each year at 10% per annum on a straight line basis. It trades this van for Rs. 5,000.
What is the gain or loss on the disposal of the old van?

Gain of Rs. 2,900

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Gain of Rs. 2,100

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Loss of Rs. 1,400

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Loss of Rs. 9,400

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is A
Gain of Rs. 2,900

Depreciation per year
= Rs. 3,000 x 10%
= Rs. 300

Book Value
= Rs. 3,000 - $(R s . 300 * 3)$
= Rs. 2,100

Gain
= Rs. 5,000 - Rs. 2,100
= Rs. 2,900

Suggest Corrections

Similar questions

Q. Question : Kapil Ltd purchased a machinery on July 1, 2001 for Rs

3, 50, 000

. It purchased two additional machines, on April 1, 2002 costing Rs

1, 50, 000

and on October 1, 2002, costing Rs

1, 00, 000

. Depreciation is provided @

10 %

per annum on straight line basis. On January 1, 2003, first machinery become useless due to technical changes. This machinery was sold for Rs

1, 00, 000

. Prepare Machinery account for 4 years on the basis of calendar year.

Kapil Ltd purchased a machinery on July 1, 2001, for Rs 3,50,000. It purchased two additional machines, on April 1, 2002 costing Rs 1,50,000 and on October 1, 2002, costing Rs 1,00,000. Depreciation is provided @ $10 %$ per annum on straight lines basis. On January 1, 2003, the first machinery becomes useless due to technical changes. This machinery was sold for Rs 1,00,000. Prepare Machinery account for 4 years on the basis of the calendar year.

Q. Question: The following balances appear in the books of Crystal Ltd on January 1, 2005

Items	(Rs)
Machinery account on	$15, 00, 000$
Provision for depreciation account	$5, 50, 000$

On April 1, 2005, a machinery which was purchased on January 1, 2002 for Rs

2, 00, 000

was sold for Rs

75, 000

. A new machine was purchased on July 1, 2005, for Rs

6, 00, 000

. Depreciation is provided on machinery at

20 %

per annum on straight-line method and books are closed on December 31st every year. Prepare the Machinery account and Provision for depreciation account for the year ending December 31, 2005.

Pronto Pack Ltd. sells its old packaging machine for Rs. 300 on 31 December 2005. The machine was bought during the year ended 31 December 2000 for Rs. 10,000. Depreciation on plant and machinery is charged at 20% on a straight-line basis. The effect due to disposal of machine is:

The following balances appear in the books of Crystal Ltd on January 1, 2005

$\begin{matrix} Items & (R s) Machinery account on & 15, 00, 000 Provision for depreciation account & 5, 50, 000 \end{matrix}$

On April 1, 2005, a machinery which was purchased on January 1, 2002 for Rs 2,00,000 was sold for Rs 75,000. A new machine was purchased on July 1, 2005 for Rs 6,00,000. Depreciation is provided on machinery at $20 %$ per annum on straight line method and books are closed on December 31st every year. Prepare the Machinery account and Provision for depreciation account for the year ending December 31, 2005.

Join BYJU'S Learning Program

An enterprise sells on 1 January 2005 a van which it bought on 1 January 2002 for Rs. 3,000, and has been depreciating the van each year at 10% per annum on a straight line basis. It trades this van for Rs. 5,000. What is the gain or loss on the disposal of the old van?

The correct option is A Gain of Rs. 2,900 Depreciation per year = Rs. 3,000 x 10% = Rs. 300 Book Value = Rs. 3,000 - (Rs.300∗3) = Rs. 2,100 Gain = Rs. 5,000 - Rs. 2,100 = Rs. 2,900

An enterprise sells on 1 January 2005 a van which it bought on 1 January 2002 for Rs. 3,000, and has been depreciating the van each year at 10% per annum on a straight line basis. It trades this van for Rs. 5,000.
What is the gain or loss on the disposal of the old van?

The correct option is A
Gain of Rs. 2,900

Depreciation per year
= Rs. 3,000 x 10%
= Rs. 300

Book Value
= Rs. 3,000 - $(R s . 300 * 3)$
= Rs. 2,100

Gain
= Rs. 5,000 - Rs. 2,100
= Rs. 2,900