Question

A firm purchased a second-hand machine on 1st April, 2015 and paid ₹ 1,40,000 for it. It spent on its overhauling and installation ₹ 20,000. On 1st October, 2015, another machine costing ₹ 80,000 was purchased. On 1st October, 2017, the machine purchased on 1st April, 2015 was disposed off for ₹ 1,04,000, charging CGST and SGST @ 6% each and a new machine costing ₹ 2,00,000 was installed, paying CGST and SGST @ 6% each. Depreciation was provided @ 10% p.a. by the Straight Line Method. Give the Machinery Account and Depreciation Account for 3 years. Firm's books are closed on 31st March every year.

Answer 1

Machinery Account
Dr.											Cr.
Date		Particulars		J.F.	Amount (Rs)	Date	Particulars		J.F.	Amount (Rs)
2015						2016
April 01		Bank (I)			1,60,000	Mar.31	Depreciation
Oct.01		Bank (II)			80,000		I	16,000
							II	4,000		20,000
						Mar.31	Balance c/d
							I	1,44,000
							II	76,000		2,20,000
					2,40,000					2,40,000
2016						2017
April 01		Balance b/d				Mar.31	Depreciation
		I	1,44,000				I	16,000
		II	76,000		2,20,000		II	8,000		24,000
						Mar.31	Balance c/d
							I	1,28,000
							II	68,000		1,96,000
					2,20,000					2,20,000
2017						2017
April 01		Balance b/d				Oct.01	Depreciation (I) (6 Months)			8,000
		I	1,28,000			Oct.01	Bank			1,04,000
		II	68,000		1,96,000	Oct.01	Profit and Loss (Loss)			16,000
Oct.01		Bank (III)			2,00,000	2018
						Mar.31	Depreciation
							II	8,000
							III (for 6 months)	10,000		18,000
						Mar.31	Balance c/d
							II	60,000
							III	1,90,000		2,50,000
					3,96,000					3,96,000

Working Notes

1. Calculation of Depreciation

2. Calculation of profit on loss on sale of Machine (I)

Particulars	Amount (Rs)
Book Value on April 01, 2017	1,28,000
Less: Depreciation for 6 Months	(8,000)
Book Value on Oct 01, 2017	1,20,000
Less: Sale Value	(1,04,000)
Loss on Sale	16,000

3. Journal entries for sale and purchase with GST

Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2017
Oct 1	Bank A/c	Dr.		1,16,480
	To Machinery A/c				1,04,000
	To Output CGST A/c To Output SGST A/c (Machinery purchased on 1st Aug, 2015 sold with CGST and SGST @ 6% each.)				6,240 6,240
Oct 1	Machinery A/c Input CGST A/c Input SGST A/c To Bank A/c (Machinery purchased with CGST and SGST @ 6% each paid.)	Dr. Dr. Dr.		2,00,000 12,000 12,000	2,24,000