Question : Kapil Ltd purchased a machinery on July 1, 2001 for Rs $3, 50, 000$ . It purchased two additional machines, on April 1, 2002 costing Rs $1, 50, 000$ and on October 1, 2002, costing Rs $1, 00, 000$ . Depreciation is provided @ $10 %$ per annum on straight line basis. On January 1, 2003, first machinery become useless due to technical changes. This machinery was sold for Rs $1, 00, 000$ . Prepare Machinery account for 4 years on the basis of calendar year.

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Solution

Answer :
Dr Machinery Account Cr
Date Particulars JF Amt.(Rs) Date Particulars JF Amt. (Rs)
2001
Jul 1 To Bank A/c $3, 50, 000$ 2001 Dec 31 To Depreciation A/c (@ $10 %$ for 6 months) $17, 500$
Dec 31 By Balance c/d $3, 32, 500$
$3, 50, 000$ $3, 50, 000$
2002 Jan 1
To Balance b/d (M1) $3, 32, 500$ 2002 Dec 31 By Depreciation
A/c
M1 = $35, 000$
M2 = $11, 250$
M3 = (3 months) $2, 500$
$48, 750$
Apr 1

Oct 1
To Bank A/c (M2)
To Bank A/c (M3)
$1, 50, 000$
$1, 00, 000$
Dec 31 By Balance c/d
M1 = $2, 97, 500$
M2= $1, 38, 750$
M3 = $97, 500$
$5, 33, 750$
$5, 82, 500$ $5, 82, 500$
2003
Jan 1
To Balance b/d
M1 = $2, 97, 500$
M2 = $1, 38, 750$
M3 = $97, 500$
$5, 33, 750$ 2003 Jan 1 By Bank A/c (M1) $1, 00, 000$
Jan 1 By Profit & Loss A/c (Loss) $1, 97, 500$
By Depreciation A/c
M2 = $15, 000$
M3 = $10, 000$
$25, 000$
Dec 31 By Balance c/d
M2 = $1, 23, 750$
M3 = $87, 500$
$2, 11, 250$
$5, 33, 750$ $5, 33, 750$

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Date	Particulars	JF	Amt.(Rs)	Date	Particulars	JF	Amt. (Rs)
2001 Jul 1	To Bank A/c		$3, 50, 000$	2001 Dec 31	To Depreciation A/c (@ $10 %$ for 6 months)		$17, 500$
				Dec 31	By Balance c/d		$3, 32, 500$
			$3, 50, 000$				$3, 50, 000$
2002 Jan 1	To Balance b/d (M1)		$3, 32, 500$	2002 Dec 31	By Depreciation A/c M1 = $35, 000$ M2 = $11, 250$ M3 = (3 months) $2, 500$		$48, 750$
Apr 1 Oct 1	To Bank A/c (M2) To Bank A/c (M3)		$1, 50, 000$ $1, 00, 000$	Dec 31	By Balance c/d M1 = $2, 97, 500$ M2= $1, 38, 750$ M3 = $97, 500$		$5, 33, 750$
			$5, 82, 500$				$5, 82, 500$
2003 Jan 1	To Balance b/d M1 = $2, 97, 500$ M2 = $1, 38, 750$ M3 = $97, 500$		$5, 33, 750$	2003 Jan 1	By Bank A/c (M1)		$1, 00, 000$
				Jan 1	By Profit & Loss A/c (Loss)		$1, 97, 500$
					By Depreciation A/c M2 = $15, 000$ M3 = $10, 000$		$25, 000$
				Dec 31	By Balance c/d M2 = $1, 23, 750$ M3 = $87, 500$		$2, 11, 250$
			$5, 33, 750$				$5, 33, 750$