Question

A firm purchased on 1st January, 2013 a second-hand machinery for Rs.36,000 and spent Rs.4,000 on its installation. On 1st July in the same year, another machinery costing Rs.20,000 was purchased. On 1st July, 2015 machinery brought on 1st January, 2013 was sold for Rs. 12,000 and a new machine purchased for Rs. 64,000 on the same date. Depreciation is provided annually on 31st December @ 10 % per annum on the written down value method. Show the machinery account from 2013 to 2015.

Answer 1

$\begin{array}{cccccccc}\text{Dr}& & & & \text{Machinery Account}& & & \text{Cr}\end{array}$

$\begin{array}{ccccccccc}\text{Date}& \text{Particulars}& \text{JF}& \text{Amt. (Rs)}& \text{Date}& \text{Particulars}& & \text{JF}& \text{Amt. (Rs)}\\ 2013& & & & 2013& & & & \\ \text{Jan 1}& \text{To Bank A/c (Machine I)}& & 40,000& \text{Dec 31}& \text{By Depreciations A/c}& & & \\ & (Rs.36,000+Rs.4,000)& & & & \text{Machine I}& 4,000& & \\ \text{Jul 1}& \text{To Bank A/c (Machine II)}& & 20,000& & \text{Machine II}& \underset{–}{1,000}& & 5,000\\ & & & & \text{Dec 31}& \text{By Balance c/d}& & & \\ & & & & & \text{Machine I}& 36,000& & \end{array}$

$\begin{array}{cccccccccc}\text{Date}& \text{Particulars}& & \text{JF}& \text{Amt. (Rs)}& \text{Date}& \text{Particulars}& & \text{JF}& \text{Amt. (Rs)}\\ & & & & & & \text{Machine II}& & & 55,000\\ & & & & \overline{\underset{–}{\underset{–}{60,000}}}& & & & & \overline{\underset{–}{\underset{–}{60,000}}}\\ 2014& & & & & 2014& & & & \\ \text{Jan 1}& \text{To Balance b/d}& & & & \text{Dec 31}& \text{By Depreciation A/c}& & & \\ & \text{Machine I}& 36,000& & & & \text{Machine I}& 3,600& & \\ & \text{Machine II}& \underset{–}{19,000}& & 55,000& & \text{Machine II}& \underset{–}{1,900}& & 5,500\\ & & & & & \text{Dec 31}& \text{By Balance c/d}& & & \\ & & & & & & \text{Machine I}& 32,400& & \\ & & & & & & \text{Machine II}& 17,100& & 49,500\\ & & & & \overline{\underset{–}{\underset{–}{55,000}}}& & & & & \overline{\underset{–}{\underset{–}{55,000}}}\\ \text{Jan 1}& \text{To Balance b/d}& & & & \text{Jul 1}& \text{By Depreciation A/c (Machine I)}& & & 1,620\\ & & & & & & (32,400\times \frac{10}{100}\times \frac{6}{12})& & & \\ & \text{Machine I}& 32,400& & & & \text{By Bank A/c}& & & 12,000\\ & \text{Machine II}& \underset{–}{17,100}& & 49,500& & \text{By Profit and Loss A/c (Loss)}& & & 18,780\\ \text{Jul 1}& \text{To Bank A/c (Machine II)}& & & 64,000& & & & & \\ & & & & & \text{Dec 31}& \text{By Depreciation A/c}& & & \\ & & & & & & \text{Machine I}& 1,710& & \\ & & & & & & \text{Machine II}& \underset{–}{3,200}& & 4,910\\ & & & & & \text{Dec 31}& \text{By Balance c/d}& & & \\ & & & & & & \text{Machine I}& 15,390& & \\ & & & & & & \text{Machine II}& \underset{–}{60,800}& & 76,190\\ & & & & \overline{\underset{–}{\underset{–}{1,13,500}}}& & & & & \overline{\underset{–}{\underset{–}{1,13,500}}}\\ 2016& \text{To Balance b/d}& & & & & & & & \\ & \text{Machine I}& 15,390& & & & & & & \\ & \text{Machine II}& 60,800& & 76,190& & & & & \end{array}$

$\begin{array}{cc}\text{Book Value as on 1st January, 2015}& 32,400\\ \text{(-) Depreciation}& \underset{–}{1,620}\\ & 30,780\\ \text{(-) Sale Proceeds}& \underset{–}{12,000}\\ \text{Loss on Sale}& \text{Rs.}\underset{–}{18,780}\end{array}$