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Question

Suppose asset is purchased for Rs 150000, Accumulated depreciation on SLM is rs. 75000. and asset is now sold for Rs. 70000. calculate gain or loss?


  1. Loss of Rs 5000

  2. Gain of Rs 70,000

  3. Loss of Rs 80000

  4. No gain or loss


Solution

The correct option is A

Loss of Rs 5000


Loss of rs 5000 (75000-70000). Gain/ (Loss) is the difference between the value at which asset is sold and its book value.

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