On 1st April, 2019, Black Limited received a government grant of ₹ 15,00,000 for acquisition of a Machine costing ₹50,00,000. The grant was credited to the cost of the Machine. The life of the Machine is expected to be 10 years and estimated residual value at the end of 10 years is ₹ 5,00,000. The company charges depreciation on straight line basis. Due to non-fulfillment of certain conditions the company had to refund the entire grant on 1st April, 2021. On 31st March, 2023, Black Limited received certain indications of impairment of the Machine and the recoverable amount was ascertained to be ₹28,00,000 with revised useful life of 4 years and nil residual value. On 1st April, 2024, the company exchanged the Machine by paying cash of ₹2,00,000 and new Machine valued at ₹ 18,00,000. Based on the information given in above Case Scenario, answer the following Question No. 1-4:
Sub-questions (4)
What will be the carrying amount of the Machine as on 31st March, 2021 after charging depreciation for the year?
(A) ₹28,00,000
(B) ₹26,00,000
(C) ₹41,00,000
(D) ₹29,00,000
What will be the amount of depreciation to be charged on the Machine for the year ended 31st March, 2022?
(A) ₹4,87,500
(B) ₹6,37,500
(C) ₹4,50,000
(D) ₹5,37,500
What will be the impact of test of impairment on Profit & Loss Account of the company?
(A) Impairment loss of ₹4,00,000 to be debited to Profit & Loss A/c.
(B) Impairment loss of ₹4,25,000 to be debited to Profit & Loss A/c.
(C) Impairment loss of ₹6,25,000 to be debited to Profit & Loss A/c.
(D) Impairment loss of ₹15,25,000 to be debited to Profit & Loss A/c.
What will be the amount of Profit or Loss on exchange of Machine as on 1st April, 2024?
(A) Loss of ₹8,00,000
(B) Loss of ₹1,00,000
(C) Profit of ₹ 1,00,000
(D) Loss of ₹3,00,000