# the question has accumulated depreciation of 8000 of the machinery sold for rs. 46000 costing 60,000. then can we say that the cost of machinery 60,000 includes accumulated depreciation of 8000 ? If not explain with reason.

Dear Student

Cost of machinery means the amount spent to acquire it or say purchase price of machinery.
When this machinery is sold we have to deduct the accumulated Depreciation from the cost of the machine to arrive at the book value of the machine. And then this book value is compared with the sale value to arrive at profit or loss on the sale.

See,
 Particulars Amt Cost Price of Machine 60,000 Less: Accumulated Depreciation 8,000 Book Value of Machine at the time of Sale 52,000 Less : Sale Price 46,000 Loss on Sale as Sale price is less than book value 6,000

So this simply means that From the cost of a machine accumulated depreciation is required to be deducted to arrive at book value.

Regards

• 0
no, it does not, you will have to subtract the depreciation to get the value of machinery and then find the profit or loss using the selling price
• 1
But the cost includes the depreciation i mean
• 0
No the cost that is given is considered as cost price
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What are you looking for?