Answer in Accounting for bharat agarwal #98408

Purchase price of the machinery at Year 1 = 1500000

At the end of Year 1 : –

Depreciation @ 20% on 1500000 = 300000

WDV = 1500000 – 300000 = 1200000

Accumulated Depreciation = 300000

At the end of Year 2 : –

Depreciation @ 20% on 1200000 = 240000

WDV = 1200000 – 240000 = 960000

Accumulated Depreciation = 300000+240000 = 540000

At the end of Year 3 : –

Depreciation @ 20% on 960000 = 192000

WDV = 960000 – 192000 = 768000

Accumulated Depreciation = 540000+192000 = 732000

At the end of Year 4 : –

Depreciation @ 20% on 768000 = 153600

WDV = 768000 – 153600 = 614400

Accumulated Depreciation = 732000+153600 = 885600

Sale price of the machinery = 800000

WDV at the end of year 4 = 614400

Profit on sale of machinery = 185600