Advertisements
Advertisements
प्रश्न
From the following particulars, give journal entries for 2 years and prepare machinery account under straight-line method of providing depreciation:
Machinery was purchased on 1.1.2016
Price of the machine ₹ 36,000
Freight charges ₹ 2,500
Installation charges ₹ 1,500
Life of the machine 5 years
Advertisements
उत्तर
Calculation of Asset of depreciation:
Original cost = Price of the machine + Freight charges + Installation charges
= 36,000 + 2,500 + 1,500
= ₹ 40,000
Amount of depreciation = `("Original cost" - "Scrap value")/"Estimates life"`
= `(40,000 - 0)/(5 "years")`
= ₹ 8,000
| Journal Entries for 2 years | ||||
| Date | Particulars | J.F. | Debit (₹) | Credit (₹) |
| 1.1.2016 | Machinery A/c ...Dr. | 40,000 | ||
| To Bank A/c | 40,000 | |||
| (Being Machinery bought and other expenses) | ||||
| 31.12.2016 | Profit and loss A/c ...Dr. | 8,000 | ||
| To Depreciation A/c | 8,000 | |||
| (Being Depreciation transferred to profit and loss A/c) | ||||
| 31.12.2017 | Depreciation A/c ...Dr. | 8,000 | ||
| To Machinery A/c | 8,000 | |||
| (Being Depreciation Provided) | ||||
| 31.12.2017 | Profit and loss A/c ...Dr. | 8,000 | ||
| To Depreciation A/c | 8,000 | |||
| (Being Depreciation transferred to profit and loss A/c) | ||||
| Dr. | Machinery A/c | Cr. | |||||
| Date | Particulars | J.F. | Amount ₹ | Date | Particulars | J.F. | Amount ₹ |
| 1.1.2016 | To Bank A/c | 36,000 | 31.12.2016 | By Depreciation | 8,000 | ||
| 7.1.2017 | To Bank A/c | 4,000 | 31.12.2016 | To Balance c/d | 32,000 | ||
| 40,000 | 40,000 | ||||||
| 1.1.2018 | To Balance b/d | 32,000 | 31.12.2017 | By Depreciation | 8,000 | ||
| 31.12.2017 | To Balance c/d | 24,000 | |||||
| 32,000 | 32,000 | ||||||
| 1.1.2018 | To Balance | 24,000 | |||||
APPEARS IN
संबंधित प्रश्न
Select the most appropriate answer from the alternatives given below and rewrite the sentence:
The amount of depreciation remains constant every year under ______
State whether the following statement is True or False with reasons:
The Profit or Loss on sale of fixed asset is ascertained only after charging depreciation.
State whether the following statement is True or False with reasons:
Wages paid for installation of Machinery are debited to Wages A/c.
State the advantages of straight-line method of depreciation.
Distinguish between straight-line method and written down value method of providing depreciation.
An asset is purchased on 1.1.2016 for ₹ 50,000. Depreciation is to be provided annually according to the straight-line method. The useful life of the asset is 10 years and its residual value is ₹ 10,000. Accounts are closed on 31st December every year. You are required to find out the rate of depreciation and give journal entries for first two years.
On 1st April 2015 Farid of Nasik purchased a Motor Car for ₹ 55,000. The scrap value of the Motor Car was estimated at ₹ 10,000 and its estimated life is 10 years The Registration charges of the Motor Car was ₹ 5,000.
Show Motor Car Account for first four years, assuming that the books of accounts are closed on 31st March every year.
M/s Omkar Enterprise Jalgaon acquired a Printing Machine for ₹75,000 on 1 Oct 2015 and spent ₹5,000 on its transport and installation. Another Machine for ₹45,000 was purchased on 1st Jan 2017. Depreciation is charged at the rate of 20% on the Written Down Value Method, on 31st March every year.
Prepare Printing Machine Account for the first four years.
On 1st April 2015, Farid of Nasik purchased a Motor Car for ₹ 55,000. The scrap value of the Motor Car was estimated at ₹ 10,000 and its estimated life is 10 years. The Registration charges of the Motor Car was ₹ 5,000.
Show Motor Car Account for first four years, assuming that the books of accounts are closed on 31st March every year.
The Double Declining Balance Method applies depreciation:
