ON 1ST JANUARY,1990, A COMPANY BOUGHT PLANT AND MACHINERY COSTING RS 68000,IT IS ESTIMATED THAT ITS WORKING LIFE IS 10 YEARS,AT THE END OF WHICH IT WILL FETCH RS 8000. ADDITIONS ARE MADE ON 1ST JANUARY,1991 TO THE VALUE OF RS40000 (RESIDUAL VALUE RS 4000).MORE ADDITIONS ARE MADE JULY 1 1992 TO THE VALUE PF RS 9800(BREAK UP VALUE RS 800). THE WORKING LIFE OF BOTH THE ADDITIONAL plant and machinery is 20 years
Note: in the question, the method for calculating depreciation and period for which machinery account is to be prepared are not mentioned.
Here, in solution, machinery account has been provided assuming straight line method for three accounting periods from January 01 to December 31 every year.
Machinery Account | |||||
Dr. |
| Cr. | |||
Date | Particulars | Amount Rs | Date | Particulars | Amount Rs |
1990 |
|
| 1990 |
|
|
Jan 01 | Bank (i) | 68,000 | Dec. 31 | Depreciation (i) | 6,000 |
|
|
| Dec. 31 | Balance b/d (i) | 62,000 |
|
|
|
|
|
|
|
| 68,000 |
|
| 68,000 |
1991 |
|
| 1991 |
|
|
Jan 01 | Balance b/d (i) | 62,000 | Dec. 31 | Depreciation |
|
Jan 01 | Bank (ii) | 40,000 |
| (i) 6,000 (ii) 1,800 | 7,800 |
|
|
| Dec. 31 | Balance c/d |
|
|
|
|
| (i) 56,000 (ii) 38,200 | 94,200 |
|
| 1,02,000 |
|
| 1,02,000 |
1992 |
|
| 1992 |
|
|
Jan. 01 | Balance b/d | 94,200 | Dec. 31 | Depreciation |
|
| (i) 56,000 (ii) 38,200 |
|
| (i) 6,000 (ii) 1,800 |
|
July 01 | Bank (iii) | 9,800 |
| (iii) 225 six months | 8,025 |
|
|
| Dec. 31 | Balance c/d |
|
|
|
|
| (i) 50,000 (ii) 36,400 |
|
|
|
|
| (iii) 9,575 | 95,975 |
|
|
|
|
|
|
|
| 1,04,000 |
|
| 1,04,000 |
|
|
|
|
|
|
Working Note-
