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
Answer in One Sentence only:
Why depreciation is charged even in the year of loss?
Complete the following sentence:
Depreciation is charged on ______ asset.
Give the formula to find out the amount and rate of depreciation under straight line 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 firm purchased a plant for ₹ 40,000. Erection charges amounted to ₹ 2,000. The effective life of the plant is 5 years. Calculate the amount of depreciation per year under the straight-line method.
If the cost of the Computer is ₹ 40,000 and depreciation is to be charged at 8% p.a. Calculate the amount of depreciation.
M/s Sitaram and Co Purchased a Machinery on 1st January 2016 for ₹ 2,00,000. The company provides depreciation @ 10% p.a. on Reducing Balance Method on 31st March every year. Calculate Written Down Value of Machinery as of 31st March 2017.
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 Sum-of-the-Years’-Digits Method results in:
