Babu purchased on 1st April, 2016, a machine for ₹ 6,000. On 1st October, 2016, he also purchased another machine for ₹ 5,000. On 1st October, 2017, he sold the machine purchased on 1st April, 2016 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, 2017 and 2018.
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, 2017 and 2018.
Books of Babu
Machinery Account
Dr.
Cr.
Date
Particulars
J.F.
Amount
(Rs)
Date
Particulars
J.F.
Amount
(Rs)
2016
2017
Apr. 01
Bank (I)
6,000
Mar. 31
Depreciation
Oct. 01
Bank (II)
5,000
I
600
II (for 6 months)
250
850
Mar. 31
Balance c/d
I
5,400
II
4,750
10,150
11,000
11,000
2017
2017
Apr. 01
Balance b/d
Oct. 01
Depreciation (I) (for 6 months)
270
I
5,400
Oct. 01
Bank (I)
4,000
II
4,750
10,150
Oct. 01
Profit and Loss (Loss)
1,130
2018
Mar. 31
Depreciation (II)
475
Mar. 31
Balance c/d (II)
4,275
10,150
10,150
Working Note
(1) Calculation of profit or loss on sale of machine:
Particulars
Amount (Rs)
Book Value of Machinery Apr. 01, 2017
5,400
Less: Depreciation (for 6 Months)
(270)
Book Value of Machinery on Oct. 01 2017
5,130
Less: Sale
(4,000)
Loss on Sale
1,130
|
Books of Babu Machinery Account |
|||||||||||
|
Dr. |
|
Cr. |
|||||||||
|
Date |
Particulars |
J.F. |
Amount (Rs) |
Date |
Particulars |
J.F. |
Amount (Rs) |
||||
|
2016 |
|
2017 |
|
||||||||
|
Apr. 01 |
Bank (I) |
|
6,000 |
Mar. 31 |
Depreciation |
|
|
||||
|
Oct. 01 |
Bank (II) |
|
5,000 |
|
I |
600 |
|
|
|||
|
|
|
|
|
|
II (for 6 months) |
250 |
|
850 |
|||
|
|
|
|
|
Mar. 31 |
Balance c/d |
|
|
||||
|
|
|
|
|
|
I |
5,400 |
|
|
|||
|
|
|
|
|
|
II |
4,750 |
|
10,150 |
|||
|
|
|
|
11,000 |
|
|
|
11,000 |
||||
|
2017 |
|
|
|
2017 |
|
|
|
||||
|
Apr. 01 |
Balance b/d |
|
|
Oct. 01 |
Depreciation (I) (for 6 months) |
|
270 |
||||
|
|
I |
5,400 |
|
|
Oct. 01 |
Bank (I) |
|
4,000 |
|||
|
|
II |
4,750 |
|
10,150 |
Oct. 01 |
Profit and Loss (Loss) |
|
1,130 |
|||
| 2018 | |||||||||||
|
|
|
|
|
Mar. 31 |
Depreciation (II) |
|
475 |
||||
|
|
|
|
|
Mar. 31 |
Balance c/d (II) |
|
4,275 |
||||
|
|
|
|
10,150 |
|
|
|
10,150 |
||||
|
|
|
|
|
|
|
|
|
||||
Working Note
(1) Calculation of profit or loss on sale of machine:
|
Particulars |
Amount (Rs) |
|
Book Value of Machinery Apr. 01, 2017 |
5,400 |
|
Less: Depreciation (for 6 Months) |
(270) |
|
Book Value of Machinery on Oct. 01 2017 |
5,130 |
|
Less: Sale |
(4,000) |
|
Loss on Sale |
1,130 |
