Q.A machine was purchased on 1 July 2024 for ₹48,000 and sold on 28 February 2025 for ₹43,000, within the same accounting year (April 2024 to March 2025). Depreciation is charged under the Straight Line Method at 12% per annum, proportionate to the period of use. Find the depreciation for the period held and the profit or loss on sale.

Under the straight line method depreciation is fixed at 10% of cost = ₹8,000 every year. After three years (2020, 2021, 2022) the book value falls from ₹80,000 to ₹56,000. The furniture is sold for ₹40,000, so the loss on sale = 56,000 − 40,000 = ₹16,000.

This is a standard AP Inter 2nd-year (Commerce) depreciation-and-disposal question, following the NCERT/CBSE-aligned commerce method.

Depreciation each year = 10% of ₹80,000 = ₹8,000 (fixed under SLM).

Furniture Account

Capitalised cost = 72,000 + 8,000 = Rs. 80,000; SLM depreciation = Rs. 8,000 p.a. Book value on 30 June 2013 = Rs. 60,000; sold for Rs. 50,000, so loss on sale = Rs. 10,000.

Working

• Cost of machine = 72,000 (purchase) + 8,000 (repairs + installation) = Rs. 80,000
• Annual depreciation (SLM) = 10% of Rs. 80,000 = Rs. 8,000
• 2011 (full year): Rs. 8,000; book value 31-12-2011 = Rs. 72,000
• 2012 (full year): Rs. 8,000; book value 31-12-2012 = Rs. 64,000
• 2013 (1 Jan to 30 June = 6 months): 8,000 x 6/12 = Rs. 4,000; book value at sale = Rs. 60,000
• Sold for Rs. 50,000, hence loss = 60,000 - 50,000 = Rs. 10,000

Machinery Account