Accounting · Capital and Revenue Expenditure
Company ABC spent ₹5,00,000 on purchasing new machinery and sold an old machine for ₹2,00,000. Assuming the old machine was sold at its book value, how will these core transactions directly impact the Net Profit for the year before depreciation?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1No immediate impact on Net Profit as these are capital transactions✓
- 2Net Profit increases by ₹1,00,000
- 3Net Profit decreases by ₹5,00,000
- 4Net Profit decreases by ₹4,00,000
Correct answer
No immediate impact on Net Profit as these are capital transactions
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