What are the causes for depreciation?

State the advantages and limitations of written down value method of depreciation.

Calculate the rate of depreciation under straight line method from the following information
Purchased a second hand machinery on 1.1.2018 for Rs. 38,000
On 1.1.2018 spent Rs. 12,000 on its repairs
Expected useful life of machine is 4 years
Estimated residual value Rs. 6,000

Machinery was purchased on 1^st January 2015 for Rs. 4,00,000. Rs. 15,000 was spent on its erection and Rs. 10,000 on its freight charges. Depreciation is charged at 10% per annum on straight line method. The books are closed on 31^st March each year. Calculate the amount of depreciation on machinery for the first two years.

Joy and Co. purchased machinery on 1st April 2016 for Rs.75,000. On 31st March 2018, it sold the machinery for Rs.62,000. Depreciation is to be provided every year at 10% per annum on the fixed instalment method. Accounts are closed on 31st March every year. Find out the profit or loss on sale of machinery.