In the books of D Ltd. the machinery account shows a debit balance of Rs. 1,20,000 as on April 1, 2013. The machinery was sold on September 30,2014 for Rs. 60,000. The company charges depreciation @ 20% p.a. on diminishing balance method.
Depreciation for 2014-2015 and loss on sale will be:

Rs. 12,000 and Rs. 26,400

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Rs. 18,000 and Rs. 26,400

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Rs. 9,600 and Rs. 26,400

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Rs. 9,600 and Rs. 13,600

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Solution

The correct option is D Rs. 9,600 and Rs. 26,400
Balance in machinery account on 1.04.2013 = RS-1,20,000.
Depreciation for the year 2013-14 = RS-1,20,000 x 20/100
= Rs-24,000.
Depreciation for the year 2014-15 = (1,20,000 - 24,000) RS-96,000 X 20%
= RS-9,600. (April to September)
WDV on 30th September 2014 = 1,20,000 - 24,000 - 9,600
= RS-86,400.
Loss on the sale of asset = Sale value - WDV of asset
= RS-60,000 - RS-86,400
= Loss of RS-26,400.

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In the books of D Ltd. the machinery account shows a debit balance of Rs. 1,20,000 as on April 1, 2013. The machinery was sold on September 30,2014 for Rs. 60,000. The company charges depreciation @ 20% p.a. on diminishing balance method.Depreciation for 2014-2015 and loss on sale will be:

In the books of D Ltd. the machinery account shows a debit balance of Rs. 1,20,000 as on April 1, 2013. The machinery was sold on September 30,2014 for Rs. 60,000. The company charges depreciation @ 20% p.a. on diminishing balance method.
Depreciation for 2014-2015 and loss on sale will be: