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Machinery purchased on 1/04/2014 for Rs.200000 .Depriciation@10% (SLM)

Machinery sold for Rs. 180000 on 30.04.16

What is Profit or loss on Sale of Asset?

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STEP 1

Calculate Dep and Closing Value for Different years

 Particulars

2014 - 15                 

SLM Basis

2015-16 2016-17
Opening value 200000 180000

160000

less Dep 10%

20000

20000

1667

200000*10/100*1/12

 Closing Value  180000  160000  158333

Cost Price - Depreciation = 158333  

Sales Price  = 180000

Profit on Sale of Asset  = 180000-158333  = 21667

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Pass Entries For Depreciation

Entry for depreciation 1st year (1/04/2014 to 31/3/2015)

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3/31/2015

Depriciation A/c Dr          20000

To Machinery         20000

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Entries For Depriciation for 2nd year (1/04/2015 to 31/03/2016)

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3/31/2016

Depriciation A/c Dr          20000

To Machinery         20000

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Entries For Sale of Fixed assets

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3/31/2016

Bank a/c / Party a/c    Dr              180000

To Machinery (200000-10000-10000)   158333

To Profit on sale of fixed assets               21667

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  1. Accounts and Finance
  2. Step 3 Passing Book Closure Entries
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About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 7 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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