Question

A company purchased on 1st April, 2009, a machinery for ₹ 80,000. On 1st October, 2010, it purchased another machine for ₹ 50,000 and on 1st October, 2011, it sold off the first machine purchased in 2009 for ₹ 23,000. Depreciation was provided on the machinery at the rate of 20% p.a. on the original cost annually.
Give the Machinery Account for four years commencing from 1st April, 2009.
Accounts are closed on 31st March every year.

Answer 1

Machinery Account
Dr.					Cr.
Date	Particulars		Amount (Rs)	Date		Particulars			Amount (Rs)
2009				2010
Apr. 01	Bank A/c (M1)		80,000	Mar. 31		Depreciation A/c			16,000
				Mar. 31		Balance c/d			64,000
			80,000						80,000
2010				2011
Apr. 01	Balance b/d		64,000	Mar. 31		Depreciation A/c
Oct. 01	Bank A/c (M2)		50,000			M1		16,000
						M2 (for 6 months)		5,000	21,000
				Mar. 31		Balance c/d
						M1	48,000
						M2	45,000		93,000
			1,14,000						1,14,000
2011				2011
Apr. 01	Balance b/d			Oct. 01		Depreciation A/c (M1)			8,000
	M1	48,000				Bank A/c (Sale of M1)			23,000
	M2	45,000	93,000			Profit and Loss A/c (Loss on Sale of M1)			17,000
				2012
				Mar. 31		Depreciation A/c			10,000
						Balance c/d			35,000
			93,000						93,000
2012				2013
Apr. 01	Balance b/d		35,000	Mar. 31		Depreciation A/c			10,000
				Mar. 31		Balance c/d			25,000
			35,000						35,000

Working Note: Calculation of Profit or Loss on Sale of M1

Particulars	Amount
Value of Machinery on Apr. 01, 2011	48,000
Less: Depreciation for 6 months	8,000
Value of Machinery on Oct. 01, 2011	40,000
Less: Sale Value	23,000
Loss on Sale	17,000