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Application of Formula of CI

A Machinery w...

Question

A Machinery was purchased for ₹ 1,80,000 on 1st July, 2015. Depreciation was charged annually @ 10% on Diminishing Balance Method. 1/4th of this Machinery was sold on 1st October, 2017 for 36,000. Prepare Machinery A/c from the year ended 31st March, 2016 to 2018, if the books are closed on 31st March every year.

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Solution

Working Note
(1)Calculation of Profit or Loss on Sale of Machine I (1/4):
Particulars
Amount
(Rs)
Book Value of Machine (I)(1/4) on Apr. 01, 2017
37,462
Less: Depreciation (for 6 months)
(1,873)
Book Value of Machine (I)(1/4) on Oct. 01, 2017
35,589
Less: Sale Value
(36,000)
Profit on Sale of Machine I(1/4)
411

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