On January 01, 2014, a Limited Company purchased machinery for Rs 20,00,000. Depreciation is provided @15% p.a. on diminishing balance method. On March 01, 2016, one fourth of machinery was damaged by fire and Rs 40,000 were received from the insurance company in full settlement. On September 01, 2016 another machinery was purchased by the company for Rs 15,00,000.
Write up the machinery account from 2016 to 2017. Books are closed on December 31, every year.
On January 01, 2014, a Limited Company purchased machinery for Rs 20,00,000. Depreciation is provided @15% p.a. on diminishing balance method. On March 01, 2016, one fourth of machinery was damaged by fire and Rs 40,000 were received from the insurance company in full settlement. On September 01, 2016 another machinery was purchased by the company for Rs 15,00,000.
Write up the machinery account from 2016 to 2017. Books are closed on December 31, every year.
Machinery Account
Dr.
Cr.
Date
Particulars
J.F.
Amount
Rs
Date
Particulars
J.F.
Amount
Rs
2016
2016
Jan.01
Balance b/d (i)
(10,83,750 + 3,61,250)
14,45,000
Mar.01
Depreciation (1/4 Machine
for 2 Months)
9,031
Sep.01
Bank (ii)
15,00,000
Mar.01
Bank
40,000
Mar.01
Profit and Loss
3,12,219
Dec.31
Depreciation (i)
(i) 1,62,563 (3/4th of machine),
(ii) 75,000
2,37,563
Dec.31
Balance c/d
(i) 9,21,187, (ii) 14,25,000
23,46,187
29,45,000
29,45,000
2017
2017
Jan.01
Balance b/d
Dec.31
Depreciation
(i) 9,21,187, (ii) 14,25,000
23,46,187
Dec.31
(i) 1,38,177, (ii) 2,13,750
3,51,927
Balance c/d
(i) 7,83,009, (ii) 12,11,250
19,94,260
23,46,187
23,46,187
Working Note:
Machine (i)
Years
January 01
Depreciation
(15% p.a.)
=
Closing Balance
2014
20,00,000
–
3,00,000
=
17,00,000
2015
17,00,000
–
2,55,000
=
14,45,000
2016
14,45,000
1/4th of Machine (i)
Years
Opening Balance
Depreciation
(15% p.a.)
=
Closing Balance
2014
5,00,000
–
75,000
=
4,25,000
2015
4,25,000
–
63,750
=
3,61,250
2016
3,61,250
–
9,031 (2 months)
=
3,52,219
Value on 1 Mar. 2016
=
3,52,219
Insurance Claim
=
40,000
Loss
Rs 3,12,219
|
Machinery Account |
|||||||
|
Dr. |
|
|
|
|
|
|
Cr. |
|
Date |
Particulars |
J.F. |
Amount Rs |
Date |
Particulars |
J.F. |
Amount Rs |
|
2016 |
|
|
|
2016 |
|
|
|
|
Jan.01 |
Balance b/d (i) (10,83,750 + 3,61,250) |
|
14,45,000 |
Mar.01 |
Depreciation (1/4 Machine for 2 Months) |
|
9,031 |
|
Sep.01 |
Bank (ii) |
|
15,00,000 |
Mar.01 |
Bank |
|
40,000 |
|
|
|
|
|
Mar.01 |
Profit and Loss |
|
3,12,219 |
|
|
|
|
|
Dec.31 |
Depreciation (i) |
|
|
|
|
|
|
|
|
(i) 1,62,563 (3/4th of machine), (ii) 75,000 |
|
2,37,563 |
|
|
|
|
|
Dec.31 |
Balance c/d |
|
|
|
|
|
|
|
|
(i) 9,21,187, (ii) 14,25,000 |
|
23,46,187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,45,000 |
|
|
|
29,45,000 |
|
|
|
|
|
|
|
|
|
|
2017 |
|
|
|
2017 |
|
|
|
|
Jan.01 |
Balance b/d |
|
|
Dec.31 |
Depreciation |
|
|
|
|
(i) 9,21,187, (ii) 14,25,000 |
|
23,46,187 |
Dec.31 |
(i) 1,38,177, (ii) 2,13,750 |
|
3,51,927 |
|
|
|
|
|
|
Balance c/d |
|
|
|
|
|
|
|
|
(i) 7,83,009, (ii) 12,11,250 |
|
19,94,260 |
|
|
|
|
23,46,187 |
|
|
|
23,46,187 |
|
|
|
|
|
|
|
|
|
Working Note:
Machine (i)
|
|
|
|
|
|
|
|
Years |
January 01 |
|
Depreciation (15% p.a.) |
= |
Closing Balance |
|
2014 |
20,00,000 |
– |
3,00,000 |
= |
17,00,000 |
|
2015 |
17,00,000 |
– |
2,55,000 |
= |
14,45,000 |
|
2016 |
14,45,000 |
|
|
|
|
1/4th of Machine (i)
|
|
|
|
|
|
|
|
Years |
Opening Balance |
|
Depreciation (15% p.a.) |
= |
Closing Balance |
|
2014 |
5,00,000 |
– |
75,000 |
= |
4,25,000 |
|
2015 |
4,25,000 |
– |
63,750 |
= |
3,61,250 |
|
2016 |
3,61,250 |
– |
9,031 (2 months) |
= |
3,52,219 |
|
Value on 1 Mar. 2016 |
= |
3,52,219 |
|
Insurance Claim |
= |
40,000 |
|
Loss |
|
Rs 3,12,219 |
