Calculation of Depreciation

The machine was bought on 1st July 1999 for Rs. 50,000. Depreciation is provided on a written basis at 20% per annum. To calculate the depreciation, we need to determine the useful life of the machine.

The useful life of the machine can be calculated using the formula:
Useful Life = Cost of Asset / Annual Depreciation

In this case, the cost of the asset is Rs. 50,000 and the annual depreciation rate is 20%. Therefore, the annual depreciation would be:
Annual Depreciation = Cost of Asset * Depreciation Rate
Annual Depreciation = Rs. 50,000 * 20% = Rs. 10,000

Now, we can calculate the useful life of the machine:
Useful Life = Rs. 50,000 / Rs. 10,000 = 5 years

So, the machine has a useful life of 5 years.

Calculation of Accumulated Depreciation

The machine was bought on 1st July 1999 and discarded on 1st October 2001. Accounts are closed each year on 31st December. Therefore, the machine was used for 2 years and 3 months.

To calculate the accumulated depreciation, we need to multiply the annual depreciation by the number of years the machine was used. Since the machine was used for 2 years and 3 months, we need to convert the months into a fraction of a year.
Number of Years = 2 + (3/12) = 2.25 years

Now, we can calculate the accumulated depreciation:
Accumulated Depreciation = Annual Depreciation * Number of Years Used
Accumulated Depreciation = Rs. 10,000 * 2.25 = Rs. 22,500

The accumulated depreciation of the machine is Rs. 22,500.

Calculation of Loss on Sale

The machine was sold for Rs. 26,000. To calculate the loss on sale, we need to compare the selling price with the net book value of the asset.

Net Book Value = Cost of Asset - Accumulated Depreciation
Net Book Value = Rs. 50,000 - Rs. 22,500 = Rs. 27,500

The net book value of the machine is Rs. 27,500.

To calculate the loss on sale, we subtract the selling price from the net book value:
Loss on Sale = Net Book Value - Selling Price
Loss on Sale = Rs. 27,500 - Rs. 26,000 = Rs. 1,500

Therefore, the loss on sale of the asset is Rs. 1,500.