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Question

Evergreen Traders purchased a machine on 1st April, 2012 at a cost of Rs. 8,000 and spent Rs. 2,000 on its installation. The firm writes off depreciation @ 10 % per annum by fixed instalment method.
Show the machine account for 4 years in the books of Evergreen Traders. The books are closed on 31st March every year.

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Solution

Dr Machinery Account Cr

DateParticularsJFAmt. (Rs)DateParticularsJFAmt. (Rs)20122013Apr 1Bank A/c(8,000+2,000)10,000Mar 31Depreciation A/c1,000(10% on Rs. 10,000)Mar 31Balance c/d9,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯10,000––––––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯10,000––––––––––––20132014Apr 1Balance b/d9,000Mar 31Depreciation A/c1,000Dec 31Balance c/d8,000¯¯¯¯¯¯¯¯¯¯¯¯¯9,000––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯9,000––––––––20142015Apr 1Balance b/d8,000Mar 31Depreciation A/c1,000Mar 31Balance c/d7,000¯¯¯¯¯¯¯¯¯¯¯¯¯8,000––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯8,000––––––––20152016Apr 1Balance b/d7,000Mar 31Depreciation A/c1,000Mar 31Balance c/d6,000¯¯¯¯¯¯¯¯¯¯¯¯¯7,000––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯7,000––––––––2016Apr 1Balance b/d6,000


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