Books of Mumbai Chemicals Ltd showed the following balances on 1st April, 2012: Machinery A/c Rs 10,00,000 Provision - Accountancy - Depreciation Provisions and Reserves

Question

Books of Mumbai Chemicals Ltd showed the following balances on
1st April, 2012:

Machinery A/c Rs 10,00,000
Provision for Depriciation A/c Rs 4,05,000

On 1st April, 2012, a machine which had a cost of Rs 2,00,000 on
1st Oct, 2009 was sold for Rs 80,000 The firm writes off
depriciation @ 10% pa under the reducing balance method and its
accounts are made up on 31st March every year You are required to
prepare the machinery account and provision for depriciation
account for the year ending 31st March, 2013

Manisha Arora · Accepted Answer

Machinery Account

Dr
Cr

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

2010

2012

Jan 01
Balance b/d
10,00,000
Apr 01
Machinery Disposal A/c
2,00,000

2013

Mar 31
Balance c/d
8,00,000

10,00,000

Provision for Depreciation
Account

Dr
Cr

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

2012

Apr 01
Machinery Disposal A/c
46,100
Apr 01
Balance b/d
4,05,000

2013

Mar 31
Balance c/d
4,03,010
Mar 31
Depreciation A/c
44,110

4,49,110

2013

Apr 01
Balance b/d
4,03,010

Working Notes:

Depreciation provided on Machinery sold till Apr
01,2012

Particulars
Amount
(Rs)

For Oct 01, 2009 – Mar
31, 2010 (Rs 2,00,000*10%*6/12)
10,000

For 2010 - 2011 (Rs
2,00,000-10,000)*10%
19,000

For 2011 - 2012 (Rs
2,00,000-10,000-19,000)*10%
17,1000

Total Depreciation Provided on
Machinery sold
46,100

Particulars
Amount

Balance of Provision for Depreciation as
on Apr 01,2012
4,05,000

Less: Accumulated Depreciation on
Machinery sold
46,100

Depreciation on remaining Machinery
3,58,900

Coat of remaining Machinery
(Rs 10,00,000 – Rs 2,00,000)
8,00,000

Less: Depreciation on remaining Machinery
(As Above)
3,58,000

4,41,100

Depreciation provided during the year 2012-2013 = Rs 4,41,000*10% =
Rs 44,110

Machinery Account
Dr.				Cr.
Date	Particulars	Amount (Rs)	Date		Particulars	Amount (Rs)
2010			2012
Jan. 01	Balance b/d	10,00,000	Apr.01		Machinery Disposal A/c	2,00,000
			2013
			Mar.31		Balance c/d	8,00,000
		10,00,000				10,00,000

Provision for Depreciation Account
Dr.				Cr.
Date	Particulars	Amount (Rs)	Date		Particulars	Amount (Rs)
2012			2012
Apr.01	Machinery Disposal A/c	46,100	Apr.01		Balance b/d	4,05,000

2013			2013
Mar.31	Balance c/d	4,03,010	Mar. 31		Depreciation A/c	44,110
		4,49,110				4,49,110
			2013
			Apr.01		Balance b/d	4,03,010

*Depreciation provided on Machinery sold till Apr.01,2012*
Particulars	Amount (Rs)
For Oct.01, 2009 – Mar.31, 2010 (Rs 2,00,00010%6/12)	10,000
For 2010 - 2011 (Rs 2,00,000-10,000)*10%	19,000
For 2011 - 2012 (Rs 2,00,000-10,000-19,000)*10%	17,1000
Total Depreciation Provided on Machinery sold	46,100

Particulars	Amount
Balance of Provision for Depreciation as on Apr.01,2012	4,05,000
Less: Accumulated Depreciation on Machinery sold	46,100
Depreciation on remaining Machinery	3,58,900

Coat of remaining Machinery (Rs 10,00,000 – Rs 2,00,000)	8,00,000
Less: Depreciation on remaining Machinery (As Above)	3,58,000
	4,41,100