A firm purchased a second hand machine on 1st april 2005 and paid 140000 rs for it. its spent on its overhauling and installation 20000 rs . on 1st october , 2005 another machine coasting 80000 rs was purchased , on 1st october 2007 the machine purchased on 1st april, 2005 was disposed off 104000 rs and a new machine coasting 200000rs was installed. Depreciation was provided @10% p.a. by the straight line method. give the macinery account and depreciation accounts for 3 years. Firms book are closed on 31st march.

Machinery Account 

Dr.

 

Cr.

Date

Particulars

J.F.

Amount

Rs

Date

Particulars

J.F.

Amount

Rs

2005

 

 

 

2006

 

 

 

April 01

Bank  (i)

 

1,60,000

March 31

Depreciation

(i) 16,000

(ii) 4,000 (6 Months)

 

20,000

Oct. 01

Bank (ii)

 

80,000

March 31

Balance c/d

(i) 1,44,000

(ii) 76,000

 

2,20,000

 

 

 

2,40,000

 

 

 

2,40,000

2006

 

 

 

2007

 

 

 

April 01

Balance b/d

(i) 1,44,000

(ii) 76,000

 

2,20,000

March 31

Depreciation

(i) 16,000

(ii) 8,000

 

24,000

 

 

 

 

March 31

Balance c/d

(i) 1,28,000

(ii) 68,000

 

1,96,000

 

 

 

2,20,000

 

 

 

2,20,000

2007

 

 

 

2007

 

 

 

April 01

Balance b/d

(i) 1,28,000

(ii)  68,000

 

1,96,000

Oct. 01

Depreciation

  1. 6 Months

 

8,000

Oct. 01

Bank (iii)

 

2,00,000

Oct. 01

Bank

 

1,04,000

 

 

 

 

Oct. 01

Profit and Loss (Loss)

 

16,000

 

 

 

 

2008

 

 

 

 

 

 

 

March 31

Depreciation

(ii) 8,000

(iii) 10,000 (6 Months)

 

18,000

 

 

 

 

March 31

Balance c/d

(ii) 60,000

(iii) 1,90,000

 

2,50,000

 

 

 

3,96,000

 

 

 

3,96,000

 

 

 

 

 

 

 

 

Depreciation Account

Depreciation Account

Dr.

Cr.

Date

Particulars

Amount

Date

Particulars

Amount

March 31, 2006

Machinery A/c

20,000

March 31, 2006

Profit and Loss A/c

20,000

 

 

20,000

 

 

20,000

 

 

 

 

 

 

March 31, 2007

Machinery A/c

24,000

March 31, 2007

Profit and Loss A/c

24,000

 

 

24,000

 

 

24,000

 

 

 

 

 

 

March 31, 2008

Machinery A/c

26,000

March 31, 2008

Profit and Loss A/c

26,000

 

 

26,000

 

 

26,000

 

 

 

 

 

 

Working Notes:

WN 1: Calculation of Depreciation

WN 2: Calculation of profit or loss on sale of Machine (i)

Book Value on April 01, 2007

1,28,000

Less: depreciation for 6 Months

8,000

Book value on Oct. 01, 2007

1,20,000

Less: Sale Value

1,04,000

Loss on Sale

(16,000)

 

 

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