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.

Depreciation is charged only for the 8 months the machine was actually held (1 July 2024 to 28 February 2025), even though it was both bought and sold within the same accounting year.

Even though the machine was both purchased and sold within the same accounting year, depreciation must still be charged for the exact period it was actually held — from 1 July 2024 to 28 February 2025, which is 8 months.

Annual depreciation = 48,000 × 12% = ₹5,760.

Depreciation for 8 months = 5,760 × 8/12 = ₹3,840.

Book value on the date of sale = 48,000 − 3,840 = ₹44,160. …

Students sometimes assume that because an asset was bought and sold within the SAME accounting year, no depreciation at all needs to be charged before working out profit or loss on sale — depreciation must always be charged for th …