Astha Engineering Works purchased a machine on 1^st July, 2015 for ₹ 1,80,000 and spent ₹ 20,000 on its installation.
On 1st April, 2016, if purchased another machine for ₹ 2,40,000. On 1st October, 2017, the machine purchased on 1st July, 2015 was sold for ₹ 1,45,000. On 1st January, 2018, another machine was purchased for ₹ 4,00,000 plus IGST @ 12%.
Prepare the Machinery Account for the years ended 31st March, 2016 to 2018 after charging Depreciation @ 10% p.a. by Diminishing Balance Method.
Accounts are closed on 31st March every year.

Open in App

Solution

Book of Astha Engineering Works

Machinery Account

Dr.

Cr.

Date

Particulars

J.F.

Amount

(Rs)

Date

Particulars

J.F.

Amount

(Rs)

2015-16

2015-16

July 01

Bank (I) (1,80,000 + 20,000)

2,00,000

Mar.31

Depreciation (for 9 months)

15,000

Mar.31

Balance c/d

1,85,000

2,00,000

2,00,000

2016-17

2016-17

Apr.01

Balance b/d (I)

1,85,000

Mar.31

Depreciation

Apr.01

Bank (II)

2,40,000

I

18,500

II

24,000

42,500

Mar.31

Balance c/d

I

1,66,500

II

2,16,000

3,82,500

4,25,000

4,25,000

2017-18

2017-18

Apr.01

Balance b/d

Oct. 01

Depreciation (I) (for 6 months)

8,325

I

1,66,500

Oct. 01

Bank (I)

1,45,000

II

2,16,000

3,82,500

Oct. 01

Profit and Loss (Loss)

13,175

Jan.01

Bank (III)

4,00,000

Mar.31

Depreciation

II

21,600

III (for 3 months)

10,000

31,600

Mar.31

Balance c/d

II

1,94,400

III

3,90,000

5,84,400

7,82,500

7,82,500

Working Note:

(1) Calculation of profit or loss on sale of Machine I:

Particulars

Amount (Rs)

Book Value of as on Apr. 01, 2017

1,66,500

Less: Depreciation (for 6 Months)

(8,325)

Book Value on Oct 01, 2017

1,58,175

Less: Sale Value

(1,45,000)

Loss on Sale

13,175

(2) Journal entry for purchase with GST

Journal

Date

Particulars

L.F.

Debit

Amount

(₹)

Credit

Amount

(₹)

2018

Jan 01
Machinery A/c
Dr.

4,00,000

Input IGST A/c
Dr.

48,000

To Bank A/c

4,48,000

(Machinery purchased with IGST @ 12% paid)

Suggest Corrections

Similar questions

Q. Astha Engineering Works purchased a machine on 1st July, 2015 for ₹ 1,80,000 and spent ₹ 20,000 on its installation.
On 1st April, 2016, if purchased another machine for ₹ 2,40,000. On 1st October, 2017, the machine purchased on 1st July, 2015 was sold for ₹ 1,45,000 plus CGST and SGST @ 6% each. On 1st January, 2018, another machine was purchased for ₹ 4,00,000 plus IGST @ 12%.
Prepare the Machinery Account for the years ended 31st March, 2016 to 2018 after charging Depreciation @ 10% p.a. by Diminishing Balance Method. Accounts are closed on 31st March every year.

“Vinod” Engineering Works purchased a machine on 1st April 2001 for Rs.1,80,000 and spent Rs.20,000 on its installation.

On 1st January 2002, it purchased another machine for Rs.2,40,000. On 1st July 2003, the machine purchased on 1st April, 2001 was sold for Rs.1,45,000. On 1st October, 2003 another machine was purchased for Rs.4,00,000.

Prepare Machinery Account from 2001 to 2003 after charging depreciation @ 10% p.a. by diminishing balance method. Accounts are closed on 31st December every year.

Q. Babu purchased on 1st April, 2017, a machine for ₹ 6,000. On 1st October, 2017, he also purchased another machine for ₹ 5,000. On 1st October, 2018, he sold the machine purchased on 1st April, 2017 for ₹ 4,000.
It was decided that Depreciation @ 10% p.a. was to be written off every year under Diminishing Balance Method.
Assuming the accounts were closed on 31st March every year, show the Machinery Account for the years ended 31st March, 2018 and 2019.

Q. Modern Ltd. purchased a machinery on 1st August, 2016 for ₹ 60,000. On 1st October, 2017, it purchased another machine for ₹ 20,000 plus CGST and SGST @ 6% each. On 30th June, 2018, it sold the first machine purchased in 2016 for ₹ 38,500 charging IGST @ 12%. Depreciation is provided @ 20% p.a. on the original cost each year. Accounts are closed on 31st March every year. Prepare the Machinery Account for three years.

Q. On 1st April, 2015, Star Ltd. purchased 5 machines for ₹ 60,000 each. On 1st April, 2017, one of the machine was sold at a loss of ₹ 8,000. On 1st July, 2018, second machine was sold at a loss of ₹ 12,500. A new machine was purchased for ₹ 1,00,000 on 1st October, 2018.
Prepare Machinery Account for 4 years, assuming accounts are closed on 31st March each year and depreciation is charged @ 10% per annum as per Straight Line Method.

Join BYJU'S Learning Program

Book of Astha Engineering Works Machinery Account
Dr.											Cr.
Date	Particulars		J.F.	Amount (Rs)	Date	Particulars			J.F.	Amount (Rs)
2015-16					2015-16
July 01	Bank (I) (1,80,000 + 20,000)			2,00,000	Mar.31	Depreciation (for 9 months)				15,000
					Mar.31	Balance c/d				1,85,000
				2,00,000						2,00,000
2016-17					2016-17
Apr.01	Balance b/d (I)			1,85,000	Mar.31	Depreciation
Apr.01	Bank (II)			2,40,000		I		18,500
						II		24,000		42,500
					Mar.31	Balance c/d
						I	1,66,500
						II	2,16,000			3,82,500
				4,25,000						4,25,000
2017-18					2017-18
Apr.01	Balance b/d				Oct. 01	Depreciation (I) (for 6 months)				8,325
	I	1,66,500			Oct. 01	Bank (I)				1,45,000
	II	2,16,000		3,82,500	Oct. 01	Profit and Loss (Loss)				13,175
Jan.01	Bank (III)			4,00,000	Mar.31	Depreciation
						II	21,600
						III (for 3 months)	10,000			31,600
					Mar.31	Balance c/d
						II	1,94,400
						III	3,90,000			5,84,400
				7,82,500						7,82,500

Particulars	Amount (Rs)
Book Value of as on Apr. 01, 2017	1,66,500
Less: Depreciation (for 6 Months)	(8,325)
Book Value on Oct 01, 2017	1,58,175
Less: Sale Value	(1,45,000)
Loss on Sale	13,175

Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2018
Jan 01	Machinery A/c	Dr.		4,00,000
	Input IGST A/c	Dr.		48,000
	To Bank A/c				4,48,000
	(Machinery purchased with IGST @ 12% paid)