Question

A firm acquired a machine on 1^st April 2015 at a cost of ₹ 50,000. Its life is 6 years. The firm writes off depreciation @ 30% p.a. on the diminishing balance method. The firm closes its books on 31^st December every year. Show the machinery account and depreciation account for three years starting from 1^st April 2015.

Answer 1

Date	Particulars	₹
01.04.2015	Machinery purchased	50,000
31.12.2015	Less: Depreciation @ 30%	11,250
01.01.2016	Book value	38,750
31.12.2016	Less: Depreciation @ 30%	11,625
01.01.2017	Book value	27.125
31.12.2017	Less: Depreciation @ 30%	8,138
01.01.2018	Book value	18,987

Machinery A/c

Dr.							Cr.
Date	Particulars	L.F.	₹	Date	Particulars	L.F.	₹
01.04.15	To Bank A/c		50,000	31.12.15	By Depreciation A/c		11,250
				31.12.15	By Balance c/d		38,750
			50,000				50,000
01.01.16	To Balance b/d		38,750	31.12.16	By Depreciation A/c		11,625
				31.12.16	By Balance c/d		27,125
			38,750				38,750
01.01.17	To Balance b/d		27,125	31.12.17	By Depreciation A/c		8,138
				31.12.17	By Balance c/d		18,987
			27,125				27,125
01.01.18	To Balance b/d		18,987

Depreciation A/c

Dr.							Cr.
Date	Particulars	L.F.	₹	Date	Particulars	L.F.	₹
31.12.15	To Machinery A/c		11,250	31.12.15	By P & L A/c		11,250
			11,250				11,250
31.12.16	To Machinery A/c		11,625	31.12.16	By P & L A/c		11,625
			11,625				11,625
31.12.17	To Machinery A/c		8,138	31.12.17	By P & L A/c		8,138
			8,138				8,138