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Read the following hypothetical Case Study and answer the given questions:
Astha Ltd, which closes its books on 31st March every year, purchased on 1st July 2018, machinery costing ₹30,000. It purchased further machinery on 1st January 2019 costing ₹20,000 and on 1st October 2019 costing ₹10,000. On 1st April 2021 one-third of the machinery installed on 1st July 2018 became obsolete and was sold for ₹3,000.
It being given that machinery was depreciated by Diminishing Balance Method at 10% per annum.
What is the loss/profit on the sales proceeds of the machinery sold on 1st April 2021?
- a)Loss of ₹5,325
- b)Profit of ₹5,325
- c)Loss of ₹8,325
- d)No profit no loss
Correct answer is option 'A'. Can you explain this answer?
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Read the following hypothetical Case Study and answer the given quest...
Loss of ₹5,325 is the loss on the sales proceeds of the machinery sold on 1st April 2021
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Read the following hypothetical Case Study and answer the given quest...
Loss on the sales proceeds of the machinery sold on 1st April 2021
To calculate the loss/profit on the sales proceeds of the machinery sold on 1st April 2021, we need to consider the following factors:
1. Calculation of Depreciation:
According to the given information, the machinery was depreciated using the Diminishing Balance Method at a rate of 10% per annum. Since the books are closed on 31st March every year, we need to calculate the depreciation for each financial year.
- For the machinery purchased on 1st July 2018 (₹30,000), the depreciation for the financial year 2018-2019 would be ₹30,000 * 10% = ₹3,000.
- For the machinery purchased on 1st January 2019 (₹20,000), the depreciation for the financial year 2019-2020 would be ₹20,000 * 10% = ₹2,000.
- For the machinery purchased on 1st October 2019 (₹10,000), the depreciation for the financial year 2019-2020 would be ₹10,000 * 10% = ₹1,000.
2. Calculation of Accumulated Depreciation:
Using the depreciation values calculated above, we can calculate the accumulated depreciation for each financial year.
- For the financial year 2018-2019, the accumulated depreciation would be ₹3,000.
- For the financial year 2019-2020, the accumulated depreciation would be ₹3,000 + ₹2,000 + ₹1,000 = ₹6,000.
3. Calculation of Book Value:
The book value of an asset is the original cost of the asset minus the accumulated depreciation.
- For the machinery purchased on 1st July 2018, the book value as of 1st April 2021 would be ₹30,000 - ₹6,000 = ₹24,000.
4. Calculation of Loss/Profit:
The loss/profit on the sales proceeds of the machinery sold on 1st April 2021 can be calculated by comparing the book value with the actual selling price.
- The machinery was sold for ₹3,000, which is less than the book value of ₹24,000.
- Therefore, the loss on the sales proceeds would be ₹24,000 - ₹3,000 = ₹21,000.
Hence, the correct answer is option 'A' - Loss of ₹5,325.
To calculate the loss/profit on the sales proceeds of the machinery sold on 1st April 2021, we need to consider the following factors:
1. Calculation of Depreciation:
According to the given information, the machinery was depreciated using the Diminishing Balance Method at a rate of 10% per annum. Since the books are closed on 31st March every year, we need to calculate the depreciation for each financial year.
- For the machinery purchased on 1st July 2018 (₹30,000), the depreciation for the financial year 2018-2019 would be ₹30,000 * 10% = ₹3,000.
- For the machinery purchased on 1st January 2019 (₹20,000), the depreciation for the financial year 2019-2020 would be ₹20,000 * 10% = ₹2,000.
- For the machinery purchased on 1st October 2019 (₹10,000), the depreciation for the financial year 2019-2020 would be ₹10,000 * 10% = ₹1,000.
2. Calculation of Accumulated Depreciation:
Using the depreciation values calculated above, we can calculate the accumulated depreciation for each financial year.
- For the financial year 2018-2019, the accumulated depreciation would be ₹3,000.
- For the financial year 2019-2020, the accumulated depreciation would be ₹3,000 + ₹2,000 + ₹1,000 = ₹6,000.
3. Calculation of Book Value:
The book value of an asset is the original cost of the asset minus the accumulated depreciation.
- For the machinery purchased on 1st July 2018, the book value as of 1st April 2021 would be ₹30,000 - ₹6,000 = ₹24,000.
4. Calculation of Loss/Profit:
The loss/profit on the sales proceeds of the machinery sold on 1st April 2021 can be calculated by comparing the book value with the actual selling price.
- The machinery was sold for ₹3,000, which is less than the book value of ₹24,000.
- Therefore, the loss on the sales proceeds would be ₹24,000 - ₹3,000 = ₹21,000.
Hence, the correct answer is option 'A' - Loss of ₹5,325.
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Read the following hypothetical Case Study and answer the given questions:Astha Ltd, which closes its books on 31st March every year, purchased on 1st July 2018, machinery costing ₹30,000. It purchased further machinery on 1st January 2019 costing ₹20,000 and on 1st October 2019 costing ₹10,000. On 1st April 2021 one-third of the machinery installed on 1st July 2018 became obsolete and was sold for ₹3,000.It being given that machinery was depreciated by Diminishing Balance Method at 10% per annum.What is the loss/profit on the sales proceeds of the machinery sold on 1st April 2021?a)Loss of ₹5,325b)Profit of ₹5,325c)Loss of ₹8,325d)No profit no lossCorrect answer is option 'A'. Can you explain this answer?
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Read the following hypothetical Case Study and answer the given questions:Astha Ltd, which closes its books on 31st March every year, purchased on 1st July 2018, machinery costing ₹30,000. It purchased further machinery on 1st January 2019 costing ₹20,000 and on 1st October 2019 costing ₹10,000. On 1st April 2021 one-third of the machinery installed on 1st July 2018 became obsolete and was sold for ₹3,000.It being given that machinery was depreciated by Diminishing Balance Method at 10% per annum.What is the loss/profit on the sales proceeds of the machinery sold on 1st April 2021?a)Loss of ₹5,325b)Profit of ₹5,325c)Loss of ₹8,325d)No profit no lossCorrect answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Read the following hypothetical Case Study and answer the given questions:Astha Ltd, which closes its books on 31st March every year, purchased on 1st July 2018, machinery costing ₹30,000. It purchased further machinery on 1st January 2019 costing ₹20,000 and on 1st October 2019 costing ₹10,000. On 1st April 2021 one-third of the machinery installed on 1st July 2018 became obsolete and was sold for ₹3,000.It being given that machinery was depreciated by Diminishing Balance Method at 10% per annum.What is the loss/profit on the sales proceeds of the machinery sold on 1st April 2021?a)Loss of ₹5,325b)Profit of ₹5,325c)Loss of ₹8,325d)No profit no lossCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Read the following hypothetical Case Study and answer the given questions:Astha Ltd, which closes its books on 31st March every year, purchased on 1st July 2018, machinery costing ₹30,000. It purchased further machinery on 1st January 2019 costing ₹20,000 and on 1st October 2019 costing ₹10,000. On 1st April 2021 one-third of the machinery installed on 1st July 2018 became obsolete and was sold for ₹3,000.It being given that machinery was depreciated by Diminishing Balance Method at 10% per annum.What is the loss/profit on the sales proceeds of the machinery sold on 1st April 2021?a)Loss of ₹5,325b)Profit of ₹5,325c)Loss of ₹8,325d)No profit no lossCorrect answer is option 'A'. Can you explain this answer?.
Read the following hypothetical Case Study and answer the given questions:Astha Ltd, which closes its books on 31st March every year, purchased on 1st July 2018, machinery costing ₹30,000. It purchased further machinery on 1st January 2019 costing ₹20,000 and on 1st October 2019 costing ₹10,000. On 1st April 2021 one-third of the machinery installed on 1st July 2018 became obsolete and was sold for ₹3,000.It being given that machinery was depreciated by Diminishing Balance Method at 10% per annum.What is the loss/profit on the sales proceeds of the machinery sold on 1st April 2021?a)Loss of ₹5,325b)Profit of ₹5,325c)Loss of ₹8,325d)No profit no lossCorrect answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Read the following hypothetical Case Study and answer the given questions:Astha Ltd, which closes its books on 31st March every year, purchased on 1st July 2018, machinery costing ₹30,000. It purchased further machinery on 1st January 2019 costing ₹20,000 and on 1st October 2019 costing ₹10,000. On 1st April 2021 one-third of the machinery installed on 1st July 2018 became obsolete and was sold for ₹3,000.It being given that machinery was depreciated by Diminishing Balance Method at 10% per annum.What is the loss/profit on the sales proceeds of the machinery sold on 1st April 2021?a)Loss of ₹5,325b)Profit of ₹5,325c)Loss of ₹8,325d)No profit no lossCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Read the following hypothetical Case Study and answer the given questions:Astha Ltd, which closes its books on 31st March every year, purchased on 1st July 2018, machinery costing ₹30,000. It purchased further machinery on 1st January 2019 costing ₹20,000 and on 1st October 2019 costing ₹10,000. On 1st April 2021 one-third of the machinery installed on 1st July 2018 became obsolete and was sold for ₹3,000.It being given that machinery was depreciated by Diminishing Balance Method at 10% per annum.What is the loss/profit on the sales proceeds of the machinery sold on 1st April 2021?a)Loss of ₹5,325b)Profit of ₹5,325c)Loss of ₹8,325d)No profit no lossCorrect answer is option 'A'. Can you explain this answer?.
Solutions for Read the following hypothetical Case Study and answer the given questions:Astha Ltd, which closes its books on 31st March every year, purchased on 1st July 2018, machinery costing ₹30,000. It purchased further machinery on 1st January 2019 costing ₹20,000 and on 1st October 2019 costing ₹10,000. On 1st April 2021 one-third of the machinery installed on 1st July 2018 became obsolete and was sold for ₹3,000.It being given that machinery was depreciated by Diminishing Balance Method at 10% per annum.What is the loss/profit on the sales proceeds of the machinery sold on 1st April 2021?a)Loss of ₹5,325b)Profit of ₹5,325c)Loss of ₹8,325d)No profit no lossCorrect answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
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Read the following hypothetical Case Study and answer the given questions:Astha Ltd, which closes its books on 31st March every year, purchased on 1st July 2018, machinery costing ₹30,000. It purchased further machinery on 1st January 2019 costing ₹20,000 and on 1st October 2019 costing ₹10,000. On 1st April 2021 one-third of the machinery installed on 1st July 2018 became obsolete and was sold for ₹3,000.It being given that machinery was depreciated by Diminishing Balance Method at 10% per annum.What is the loss/profit on the sales proceeds of the machinery sold on 1st April 2021?a)Loss of ₹5,325b)Profit of ₹5,325c)Loss of ₹8,325d)No profit no lossCorrect answer is option 'A'. Can you explain this answer?, a detailed solution for Read the following hypothetical Case Study and answer the given questions:Astha Ltd, which closes its books on 31st March every year, purchased on 1st July 2018, machinery costing ₹30,000. It purchased further machinery on 1st January 2019 costing ₹20,000 and on 1st October 2019 costing ₹10,000. On 1st April 2021 one-third of the machinery installed on 1st July 2018 became obsolete and was sold for ₹3,000.It being given that machinery was depreciated by Diminishing Balance Method at 10% per annum.What is the loss/profit on the sales proceeds of the machinery sold on 1st April 2021?a)Loss of ₹5,325b)Profit of ₹5,325c)Loss of ₹8,325d)No profit no lossCorrect answer is option 'A'. Can you explain this answer? has been provided alongside types of Read the following hypothetical Case Study and answer the given questions:Astha Ltd, which closes its books on 31st March every year, purchased on 1st July 2018, machinery costing ₹30,000. It purchased further machinery on 1st January 2019 costing ₹20,000 and on 1st October 2019 costing ₹10,000. On 1st April 2021 one-third of the machinery installed on 1st July 2018 became obsolete and was sold for ₹3,000.It being given that machinery was depreciated by Diminishing Balance Method at 10% per annum.What is the loss/profit on the sales proceeds of the machinery sold on 1st April 2021?a)Loss of ₹5,325b)Profit of ₹5,325c)Loss of ₹8,325d)No profit no lossCorrect answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Read the following hypothetical Case Study and answer the given questions:Astha Ltd, which closes its books on 31st March every year, purchased on 1st July 2018, machinery costing ₹30,000. It purchased further machinery on 1st January 2019 costing ₹20,000 and on 1st October 2019 costing ₹10,000. On 1st April 2021 one-third of the machinery installed on 1st July 2018 became obsolete and was sold for ₹3,000.It being given that machinery was depreciated by Diminishing Balance Method at 10% per annum.What is the loss/profit on the sales proceeds of the machinery sold on 1st April 2021?a)Loss of ₹5,325b)Profit of ₹5,325c)Loss of ₹8,325d)No profit no lossCorrect answer is option 'A'. Can you explain this answer? tests, examples and also practice Commerce tests.
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