Question

A firm purchased on 1st April, 2009, a second-hand Machinery for ₹ 36,000 and spent ₹ 4,000 on its installation. On 1st Oct. in the same year another Machinery costing ₹ 20,000 was purchased. On 1st Oct., 2011, the Machinery bought on 1st April, 2009 was sold off for ₹ 12,000 and on the same date a fresh Machine was purchased for ₹ 64,000. Depreciation is provided annually on 31st March, @ 10% p.a. on the Written Down Value Method. Show the Machine A/c from 1st April, 2009 to 31st March, 2013.

Answer 1

Machinery Account
Dr.					Cr.
Date	Particulars		Amount (Rs)	Date		Particulars		Amount (Rs)
2009				2010
Apr. 01	Bank A/c (M1) (36,000 + 4,000)		40,000	Mar. 31		Depreciation A/c
Oct. 01	Bank A/c (M2)		20,000			M1	4,000
						M2 (for 6 months)	1,000	5,000
				Mar. 31		Balance c/d
						M1	36,000
						M2	19,000	55,000
			60,000					60,000
2010				2011
Apr. 01	Balance b/d			Mar. 31		Depreciation A/c
	M1	36,000				M1	3,600
	M2	19,000	55,000			M2	1,900	5,500
				Mar. 31		Balance c/d
						M1	32,400
						M2	17,100	49,500
			55,000					55,000
2011				2011
Apr. 01	Balance b/d			Oct. 01		Depreciation A/c (M1)		1,620
	M1	32,400				Bank A/c (Sale of M1)		12,000
	M2	17,100	49,500			Profit and Loss A/c (Loss on Sale of M1)		18,780
Oct. 01	Bank A/c (M3)		64,000	2012
				Mar. 31		Depreciation A/c
						M2	1,710
						M3 (for 6 months)	3,200	4,910
				Mar. 31		Balance c/d
						M2	15,390
						M3	60,800	76,190
			1,13,500					1,13,500
2012				2013
Apr. 01	Balance b/d			Mar. 31		Depreciation A/c
	M2	15,390				M2	1,539
	M3	60,800	76,190			M3	6,080	7,619
				Mar. 31		Balance c/d
						M2	13,851
						M3	54,720	68,571
			76,190					76,190

Working Note: Calculation of Profit or Loss on Sale

Particulars	Amount
Value of Machinery on Apr. 01, 2011	32,400
Less: Depreciation for 6 months	1,620
Value of Machinery on Oct. 01, 2011	30,780
Less: Sale Value	12,000
Loss on Sale	18,780