A used car is bought for ₹200,000 and sold for ₹140,000 after two years. If depreciation is applied at 10% per annum using the written down value method, what is the resulting profit or loss from the sale?

Explanation

The car is purchased for ₹200,000. Applying 10% depreciation on written down value: After 1 year, value = ₹200,000 × 90% = ₹180,000; After 2 years, value = ₹180,000 × 90% = ₹162,000. The car is sold for ₹140,000, which is less than the depreciated value ₹162,000, resulting in a loss of ₹22,000 (₹162,000 - ₹140,000).