Madhur and Company purchases a machine for a certain sum. The company has a policy of charging 8% depreciation on written down value. The depreciated value of the machine after three years in the books of Madhur and Company is Rs. 3,89,344. What was the purchase value of machine.

Rs. 5,00,000

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Rs. 4,60,000

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Rs. 4,23,000

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Rs. 5,52,000

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is A Rs. 5,00,000
W.D.V. at machine at the end of 3rd year = Rs. $3, 89, 344$
W.D.V. of machine at the beginning of 3rd year will be = 389344/100-8%= 389344/92%
= 423200
W.D.V. of machine at the beginning of 2nd year will be = 423200/92%= 4,60,000
W.D. V. of machine at the beginning of 1st year will be (or purchase value)= 4,60,00/92%= 5,00,000

Suggest Corrections

Similar questions

Q. M & Co. purchased a machine for a certain sum. The firm has a policy of charging 8 % depreciation on written down value. The depreciated value of machine after three years is Rs 3,89,344. Purchase price of machine = ?

Q. On 1st April, 2007, a limited company purchased a Machine for ₹ 1,90,000 and spent ₹ 10,000 on its installation. At the date of purchase, it was estimated that the scrap value of the machine would be ₹ 50,000 at the end of sixth year.
Give Machine Account and Depreciation A/c in the books of the Company for 4 years after providing depreciation by Fixed Installment Method. The books are closed on 31st March every year.

Q. On 1st April, 2015, a limited company purchased a Machine for ₹ 1,90,000 and spent ₹ 10,000 on its installation. At the date of purchase, it was estimated that the scrap value of the machine would be ₹ 50,000 at the end of sixth year.
Give Machine Account and Depreciation A/c in the books of the Company for 4 years after providing depreciation by Fixed Instalment Method. The books are closed on 31st March every year.

Shri Krishan Manufacturing Company purchased 10 machines for Rs 75,000 each on July 01, 2014. On October 01, 2016, one of the machines got destroyed by fire and an insurance claim of Rs 45,000 was admitted by the company. On the same date another machine is purchased by the company for Rs 1,25,000.

The company writes off 15% p.a. depreciation on written down value basis. The company maintains the calendar year as its financial year. Prepare the machinery account from 2014 to 2017.

Shri Krishan Manufacturing Company purchased 10 machines for Rs. 75,000 each on July 1, 2000. On October 1, 2002, one of the machines got destroyed by fire and an insurance claim of Rs. 45,000 was admitted by the company. On the same date, another machine is purchased by the company for Rs. 1,25,000.

The company writes off 15 % per annum depreciation on written down value basis. The company maintains the calendar year as its financial year. Prepare the Machinery account from 2000 to 2003.

Join BYJU'S Learning Program