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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.
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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
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संबंधित प्रश्न
Answer in One Sentence only:
Why depreciation is charged even in the year of loss?
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:
The period for which the asset remains in working condition.
State whether the following statement is True or False with reasons:
Depreciation need not be charged when business is making losses.
Complete the following sentence:
Depreciation is charged on ______ asset.
Complete the following sentence:
In Fixed Instalment System the amount of depreciation is ______ every year.
Complete the following sentence:
The amount spent on installation of Machinery is a ______ expenditure.
Under the written-down value method of depreciation, the amount of depreciation is ______.
A depreciable asset may suffer obsolescence due to ______.
Give the formula to find out the amount and rate of depreciation under straight line method of depreciation.
What is the annuity method?
What is sinking fund method?
State the limitations of written down value method of depreciation.
Distinguish between straight-line method and written down value method of providing depreciation.
A company purchased a building for ₹ 50,000. The useful life of the building is 10 years and the residual value is ₹ 5,000. Find out the amount and rate of depreciation under the straight-line method.
Calculate the rate of depreciation under straight-line method from the following information:
Purchased second-hand machinery on 1.1.2018 for ₹ 38,000
On 1.1.2018 spent ₹ 12,000 on its repairs
Expected useful life of the machine is 4 years
Estimated residual value ₹ 6,000.
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
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Show Motor Car Account for first four years, assuming that the books of accounts are closed on 31st March every year.
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On 1st October 2017, the Machinery purchased on 1st January 2016 became obsolete and was sold for ₹ 70,000. On 1st July 2017, a new Machine was also purchased for ₹ 45,000.
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Prepare Plant Account and Depreciation Account for 31st March 2015, 31st March 2016, and 31st March 2017, assuming that the rate of depreciation was @ 10% on Diminishing Balance Method.
Solution:
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.
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.
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.
A firm buys a machine that wears out faster in early years but provides greater efficiency initially. Which depreciation method would most accurately reflect this pattern?
