Advertisements
Advertisements
प्रश्न
Samarth Manufacturing Co. Ltd, Aurangabad, purchased a New Machinery for ₹ 45,000 on 1st Jan 2015 and immediately spent ₹ 5,000 on its fixation and erection. In the same year, 1st July additional Machinery costing ₹ 25,000 was purchased. On 1st July 2016, the Machinery purchased on 1st Jan 2015 became obsolete and was sold for ₹ 40,000.
Depreciation was provided annually on 31st March at the rate of 10% per annum on the Fixed Instalment Method.
You are required to prepare Machinery Account for the year 2014-15, 2015-16, 2016-17.
Advertisements
उत्तर
| In the books of Samarth Manufacturing Co. Ltd, Aurangabad | |||||||
| Dr. | Machinery Account | Cr. | |||||
| Date | Particulars | J.F. | Amt ₹ | Date | Particulars | J.F. | Amt ₹ |
| 2015 | 2015 | ||||||
| Jan. 1 | To Cash/Bank A/c | 50,000 | Mar. 31 | By Depreciation A/c | 1,250 | ||
| (45,000 + 5,000) | Mar. 31 | By Balance c/d | 48,750 | ||||
| 50,000 | 50,000 | ||||||
| 2015 | 2016 | ||||||
| Apr. 1 | To Balance b/d | 48,750 | Mar. 31 | By Depreciation A/c (5,000 + 1,875) | 6,875 | ||
| July 1 | To Cash/Bank A/c | 25,000 | Mar. 31 | By Balance c/d | 66,875 | ||
| 73,750 | 73,750 | ||||||
| 2016 | 2016 | ||||||
| Apr. 1 | To Balance b/d | 66,875 | July 1 | By Cash/Bank A/c | 40,000 | ||
| July 1 | By Depreciation A/c | 1,250 | |||||
| July 1 | By P/L A/c (loss on sale) | 2,500 | |||||
| 2017 | |||||||
| Mar. 31 | By Depreciation A/c | 2,500 | |||||
| Mar. 31 | By Balance c/d | 20,625 | |||||
| 66,875 | 66,875 | ||||||
| 2017 | |||||||
| Apr. 1 | To Balance b/d | 20,625 | |||||
Working Note:
Calculation of Profit or Loss on sale of machine:
Original cost on 01.01.2015 = ₹ 50,000
Less: Depreciation for 2014-15 (3 months) = ₹ 1,250
W.D.V. on 01-04-2015 = ₹ 48,750
Less: Depreciation for 2015-16 (12 months) = ₹ 5,000
W.D.V. on 01-04-2016 = ₹ 43,750
Less: Depreciation for 2016-17 (3 months) = ₹ 1,250
W.D.V. on date of sale = ₹ 42,500
Less: Selling price = ₹ 40,000
∴ Loss on sale of machine = ₹ 2,500
APPEARS IN
संबंधित प्रश्न
Answer in One Sentence only:
What is a ‘Scrap Value’ of an asset?
Answer in One Sentence only:
What is the formula to calculate depreciation by Straight Line Method?
Answer in One Sentence only:
What is Fixed Instalment Method?
Answer in One Sentence only:
Which account is debited when expenses are paid on installation of Machinery?
Write the word/term/phrase which can substitute the following statement:
Expenses incurred for fixation of the new asset to bring it in working condition.
Write the word/term/phrase which can substitute the following statement:
Method of depreciation that cannot reach to zero value.
Select the most appropriate answer from the alternatives given below and rewrite the sentence:
The amount of depreciation reduces year after year under ______
State whether the following statement is True or False with reasons:
Depreciation is charged on fixed assets.
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.
Do you agree or disagree with the following statement:
The rate of depreciation depends upon the life of fixed asset.
Complete the following sentence:
Under ______ system, the amount of depreciation changes every year.
Complete the following sentence:
Depreciation Account is a ______ account.
For which of the following assets, the depletion method is adopted for writing off cost of the asset?
State the advantages of written down value method of depreciation.
State the limitations of written down value method of depreciation.
Distinguish between straight-line method and written down value method of providing depreciation.
A manufacturing company purchased on 1st April 2010, a plant and machinery for ₹ 4,50,000 and spent ₹ 50,000 on its installation. After having used it for three years, it was sold for ₹ 3,85,000. Depreciation is to be provided every year at the rate of 15% per annum on the fixed installment method. Accounts are closed on 31st March every year. Calculate profit or loss on sale of machinery.
Vishal Company, Dhule, purchased Machinery costing ₹ 60,000 on 1st April 2016. They purchased further Machinery on 1st October 2017, costing ₹ 30,000, and on 1st July 2018, costing ₹ 20,000. On 1st Jan 2019, one-third of the Machinery, which was purchased on 1st April 2016, became obsolete and it was sold for ₹ 18,000.
Assume that, company account closes on 31st March every year.
Show Machinery Account for the first three(3) years and pass journal entries for the Third year, after charging depreciation at 10% p.a. on Written Down Value Method.
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 charge for 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.
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.
The Annuity Method is most suitable when:
The Sum-of-the-Years’-Digits Method results in:
The Double Declining Balance Method applies depreciation:
