A company purchased on 1stApril 2009, a machinery for Rs 80000 On 1stoctober2010, it purchased another machine for - Accountancy - Depreciation Provisions and Reserves

Question

A company purchased on 1stApril 2009, a machinery for Rs 80000 On
1stoctober2010, it purchased another machine for Rs 50000 and on
1stoctober2011, it sold off the first machine purchased in 2009 for
Rs 23000 Depreciation was provided on the machinery at the rate of
20% p a on the original cost annually Give the machinery account
for four yrs commencing from 1st april2009 accounts are closed on
31stMarch every year

Neha A. · Accepted Answer

Machinery Account

Dr
Cr

Date
Particulars
Amount
(Rs)
Date
Particulars
Amount
(Rs)

2009

2010

Apr 01
Bank A/c (M1)
80,000
Mar 31
Depreciation A/c (M1)
16,000

Mar 31
Balance c/d
64,000

80,000

2010

2011

Apr 01
Balance b/d
64,000
Mar 31
Depreciation A/c

Oct 01
Bank A/c (M2)
50,000

M1
16,000

M2 (for 6 months)
5,000
21,000

Mar 31
Balance c/d

M1
48,000

M2
45,000
93,000

1,14,000

2011

Apr 01
Balance b/d

Oct 31
Depreciation A/c (on M1 for 6
months)
8,000

M1
48,000

Bank A/c (Sale of
M1)
23,000

M2
45,000
93,000

Profit and Loss A/c (Loss on
Sale)
17,000

2012

Mar 31
Depreciation A/c (on
M2)
10,000

Mar 31
Balance c/d
35,000

93,000

2012

2013

Apr 01
Balance b/d
35,000
Mar 31
Depreciation A/c
10,000

Mar 31
Balance c/d
25,000

35,000

Working Notes

Calculation of Depreciation on Machinery Sold (M1)
Value of Machinery as on Apr 01, 2011 = Rs 48,000
Less: Depreciation for 6 months = Rs 8,000
Value of Machinery as on Oct 01, 2011 = Rs 40,000
Sale Value = Rs 23,000
Loss = â€‹Value of Machinery as on Oct 01, 2011
less Sale Value = Rs 17,000

Machinery Account
Dr.					Cr.
Date	Particulars		Amount (Rs)	Date		Particulars		Amount (Rs)
2009				2010
Apr. 01	Bank A/c (M1)		80,000	Mar. 31		Depreciation A/c (M1)		16,000
				Mar. 31		Balance c/d		64,000
			80,000					80,000
2010				2011
Apr. 01	Balance b/d		64,000	Mar. 31		Depreciation A/c
Oct. 01	Bank A/c (M2)		50,000			M1	16,000
						M2 (for 6 months)	5,000	21,000
				Mar. 31		Balance c/d
						M1	48,000
						M2	45,000	93,000
			1,14,000					1,14,000
2011				2011
Apr. 01	Balance b/d			Oct. 31		Depreciation A/c (on M1 for 6 months)		8,000
	M1	48,000				Bank A/c (Sale of M1)		23,000
	M2	45,000	93,000			Profit and Loss A/c (Loss on Sale)		17,000
				2012
				Mar. 31		Depreciation A/c (on M2)		10,000
				Mar. 31		Balance c/d		35,000
			93,000					93,000
2012				2013
Apr. 01	Balance b/d		35,000	Mar. 31		Depreciation A/c		10,000
				Mar. 31		Balance c/d		25,000
			35,000					35,000