Question

A firm purchased on 1st April, 2015 certain machinery for ₹ 5,82,000 and spent ₹ 18,000 on its installation. On 1st October, 2015, additional machinery costing ₹ 2,00,000 was purchased. On 1st October, 2017, the machinery purchased on 1st April, 2015 was auctioned for ₹ 2,86,000 plus CGST and SGST @ 6% each and a new machinery for ₹ 4,00,000, plus IGST @ 12% was purchased on the same date. Depreciation was provided annually on 31st March at the rate of 10% p.a. on the Written Down Value Method. Prepare the Machinery Account for the three years ended 31st March, 2018.

Answer 1

Machinery Account
Dr.														Cr.
Date		Particulars			J.F.	Amount (Rs)	Date	Particulars				J.F.	Amount (Rs)
2015-16							2015-16
Apr.01		Bank (I)				6,00,000	Mar.31	Depreciation
Oct.01		Bank (II)				2,00,000		I			60,000
								II (for 6 months)			10,000		70,000
							Mar.31	Balance c/d
								I		5,40,000
								II		1,90,000			7,30,000
						8,00,000							8,00,000
2016-17							2016-17
Apr.01		Balance b/d					Mar.31	Depreciation
		I		5,40,000				I		54,000
		II		1,90,000		7,30,000		II		19,000			73,000
							Mar.31	Balance c/d
								I		4,86,000
								II		1,71,000			6,57,000
						7,30,000							7,30,000
2017-18							2017-18
Apr.01		Balance b/d					Oct.01	Depreciation (I)					24,300
		I	4,86,000				Oct.01	Bank (I)					2,86,000
		II	1,71,000			6,57,000	Oct.01	Profit and Loss (Loss)					1,75,700
Oct.01		Bank (III)				4,00,000	Mar.31	Depreciation
								II	17,100
								III (for 6 months)	20,000				37,100
							Mar.31	Balance c/d
								II	1,53,900
								III	3,80,000				5,33,900
						10,57,000							10,57,000

Working Notes:

(1) Calculation of Profit or Loss on sale of Machine I:

Particulars	Amount (Rs)
Book Value of Machine I on Apr. 01, 2017	4,86,000
Less: Depreciation (for 6 Months)	(24,300)
Book Value of Machine I on Oct 01, 2017	4,61,700
Less: Sale Value	(2,86,000)
Loss on Sale	1,75,700

(2) Journal entries for sale and purchase with GST

Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2017
Oct 1	Bank A/c	Dr.		3,20,320
	To Machinery A/c				2,86,000
	To Output CGST A/c To Output SGST A/c (Machinery purchased on 1st April, 2015 sold with CGST and SGST @ 6% each.)				17,160 17,160
Oct 1	Machinery A/c Input IGST A/c To Bank A/c (Machinery purchased with IGST @ 12% paid.)	Dr. Dr.		4,00,000 48,000	4,48,000