A second-hand car bought for 2,00,000 is sold for 1,40,000 after two years. If depreciation is charged at 10% on the written down value method, what is the profit or loss on sale?
Correct answer D. Loss of 22,000
Explanation
Depreciation is 20,000 in year one and 18,000 in year two, leaving a book value of 1,62,000; selling for 1,40,000 gives a loss of 22,000.
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