Lakshmi Limited purchase of machinery for rupees 40000 on 14th October 2009 depreciation provided @ 10% per annum on the diminishing balance method on 1st January 2012 one fourth of the machinery was found unsuitable and disposed off for rupees 6000 on the same date and machinery at a cost of rupees 15000 was purchased prepare machinery account and provision for depreciation account for 4 years.

Dear Student,
Machinery A/c
Date Particulars L.F Amount Date Particulars L.f Amount
2009       2010      
14th Oct To Bank A/c   40,000 31 Mar By Balance c/d   40,000
      40,000       40,000
2010       2011      
1st Apr To balance b/d   40,000 31st Mar By Balance c/d   40,000
      40,000       40,000
2011       2012      
1st Apr To Balance b/d   40,000 1st Jan By Bank   6,000
          By Provision for Depreciation A/c   2091
2012         By Profit & Loss A/c(Loss)   1908.75
1st jan To Bank   15,000 31st Mar By Balance c/d   45,000
      55,000       55,000
2013       2013      
1st Apr To Balance b/d   45000 31st Mar By Balance c/d   45000
      45000       45000
               
 
Provision for Depreciation Account
Dr.   Cr.
Date Particulars J.F. Amount
Rs )
Date Particulars J.F. Amount
Rs )
2010       2010      
31st Mar To Balance c/d   2,000 March 31 By Depreciation A/c (M1)   2,000
      2,000       2,000
2011       2011      
Mar 31 To Balance c/d (M1)   5,800 Mar 31 By balance b/d   2,000
        March 31 By Depreciation A/c (M1)   3,800
      5,800       5,800
2011       2011      
  To Machinery   2091   By Balance b/d   5,800
31st mar To Balance c/d    7290 January 1 By Depreciation A/c (1/4 of M1)   641
        March 31 By Depreciation A/c:    
          ¾ of M1 2,565    
          M2 375   2,940
      9381       9381
2013       2013      
          By Balance b/d   7290
31st Mar To Balance c/d   11061 March 31 By Depreciation A/c    
          M1  2309     
          M2 1462   3771
               
               
      11061       11061


Regards

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