M/s Lokesh Fabrics purchased a Textile Machine on April 1, 2001 for $1, 00, 000$ . On July 1, 2002, another machine costing Rs $2, 50, 000$ was purchased on April 1, 2001, was sold for Rs $25, 000$ on October 1, 2005. The company charges depreciation @ $15 %$ per annum on the straight-line method. Prepare Machinery account and Machinery disposal account for the year ended March 31, 2006.

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Solution

Answer :
Dr Machinery Account Cr
Date Particulars JF Amt.(Rs) Date Particulars JF Amt.(Rs)
2001 Apr 1 To Bank A/c $1, 00, 000$ 2002 Mar 21 By Depreciation A/c $15, 000$
By Balance c/d $85, 000$
$1, 00, 000$ $1, 00, 000$
2002 Apr 1 To Balance b/d (M1) $85, 000$ 2003 Mar 31 By Depreciation A/c
M1 = $15, 000$
M2 = $28, 125$
$43, 125$
Jul 1 To Bank A/c (M2) $2, 50, 000$ Mar 31 By Balance c/d
M1 = $70, 000$
M2 = $2, 21, 875$
$2, 91, 875$
$3, 35, 000$ $3, 35, 000$
2003 Apr 1 To Balance b/d
M1 = $70, 000$
M2 = $2, 21, 875$
$2, 91, 875$ 2004 Mar 31 By Depreciation A/c
M1 = $15, 000$
M2 = $37, 500$
$52, 500$
Mar 31 By Balance c/d
M1 = $55, 000$
M2 = $1, 84, 375$
$2, 39, 375$
$2, 91, 875$ $2, 91, 875$
2004 Apr 1 To Balance b/d
M1 = $55, 000$
M2 = $1, 84, 375$
$2, 39, 375$ 2005 Mar 31 By Depreciation A/c
M1 = $15, 000$
M2 = $37, 500$
$52, 500$
By Balance c/d
M1 = $40, 000$
M2 = $1, 46, 875$
$1, 86, 875$
$2, 39, 375$ $2, 39, 375$
2005 Apr 1 To Balance c/d
M1 = $40, 000$
M2 = $1, 46, 875$
$1, 86, 875$ 2005 Oct 1 By Depreciation A/c $7, 500$
Oct 1 By Machinery Disposal A/c $32, 500$
Oct 1 By Depreciation A/c (M2) $37, 500$
Mar 31 By Balance c/d (M2) $1, 09, 375$
$1, 86, 875$ $1, 86, 875$

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Date	Particulars	JF	Amt.(Rs)	Date	Particulars	JF	Amt.(Rs)
2001 Apr 1	To Bank A/c		$1, 00, 000$	2002 Mar 21	By Depreciation A/c		$15, 000$
					By Balance c/d		$85, 000$
			$1, 00, 000$				$1, 00, 000$
2002 Apr 1	To Balance b/d (M1)		$85, 000$	2003 Mar 31	By Depreciation A/c M1 = $15, 000$ M2 = $28, 125$		$43, 125$
Jul 1	To Bank A/c (M2)		$2, 50, 000$	Mar 31	By Balance c/d M1 = $70, 000$ M2 = $2, 21, 875$		$2, 91, 875$
			$3, 35, 000$				$3, 35, 000$
2003 Apr 1	To Balance b/d M1 = $70, 000$ M2 = $2, 21, 875$		$2, 91, 875$	2004 Mar 31	By Depreciation A/c M1 = $15, 000$ M2 = $37, 500$		$52, 500$
				Mar 31	By Balance c/d M1 = $55, 000$ M2 = $1, 84, 375$		$2, 39, 375$
			$2, 91, 875$				$2, 91, 875$
2004 Apr 1	To Balance b/d M1 = $55, 000$ M2 = $1, 84, 375$		$2, 39, 375$	2005 Mar 31	By Depreciation A/c M1 = $15, 000$ M2 = $37, 500$		$52, 500$
					By Balance c/d M1 = $40, 000$ M2 = $1, 46, 875$		$1, 86, 875$
			$2, 39, 375$				$2, 39, 375$
2005 Apr 1	To Balance c/d M1 = $40, 000$ M2 = $1, 46, 875$		$1, 86, 875$	2005 Oct 1	By Depreciation A/c		$7, 500$
				Oct 1	By Machinery Disposal A/c		$32, 500$
				Oct 1	By Depreciation A/c (M2)		$37, 500$
				Mar 31	By Balance c/d (M2)		$1, 09, 375$
			$1, 86, 875$				$1, 86, 875$