Q.A machine purchased for ₹60,000 on 1 April 2022, depreciated at 10% per annum under the Straight Line Method and charged directly to the Machine Account, was sold on 31 March 2025 (after being held for exactly 3 full years) for ₹45,000. Compute the profit or loss on sale and show the Machine Account.

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