wiz-icon
MyQuestionIcon
MyQuestionIcon
1
You visited us 1 times! Enjoying our articles? Unlock Full Access!
Question

Modern Ltd. purchased a machinery on 1st August, 2016 for ₹ 60,000. On 1st October, 2017, it purchased another machine for ₹ 20,000 plus CGST and SGST @ 6% each. On 30th June, 2018, it sold the first machine purchased in 2016 for ₹ 38,500 charging IGST @ 12%. Depreciation is provided @ 20% p.a. on the original cost each year. Accounts are closed on 31st March every year. Prepare the Machinery Account for three years.

Open in App
Solution

Books of Modern Ltd.

Machinery Account

Dr.

Cr.

Date

Particulars

J.F.

Amount

()

Date

Particulars

J.F.

Amount

()

2016

2017

Aug.01

Bank (M1)

60,000

March 31

Depreciation

M1 (for 8 months)

8,000

March 31

Balance c/d

52,000

60,000

60,000

2017

2018

April 01

Balance b/d

52,000

March 31

Depreciation

Oct. 01

Bank (M2)

20,000

M1

12,000

M2 (6 months)

2,000

14,000

March 31

Balance c/d

M1

40,000

M2

18,000

58,000

72,000

72,000

2018

2019

April 01

Balance b/d

June 30

Depreciation (M1) (for 3 months)

3,000

M1

40,000

June 30

Bank (M1)

38,500

M2

18,000

58,000

2018

June 30 Profit and Loss (profit) 1,500 Mar.31 Depreciation (M2) 4,000

Mar.31

Balance c/d

14,000

59,500

59,500

Working Notes

1. Calculation of Annual Depreciation

Particulars

Amount

()

Value on Apr 01, 2018

40,000

Depreciation for 3 Months

(3,000)

Value on June 30, 2018

37,000

Less: Sales Value of Machine

(38,500)

Profit on sale of Machine 1

1,500


3. Journal entries for purchase and sale with GST
Journal
Date
Particulars
L.F.
Debit
Amount
(₹)
Credit
Amount
(₹)
2017
Oct 01
Machinery A/c
Dr.
20,000
Input CGST A/c
Dr.
1,200
Input SGST A/c
Dr.
1,200
To Bank A/c
22,400
(Machinery purchased with CGST and SGST @ 6% each paid)
2018
Jun 30
Bank A/c
Dr.
43,120
To Machinery A/c
38,500
To Output IGST A/c
(Machinery purchased on 1st Aug, 2015 sold with IGST @ 12%.)
4,620

flag
Suggest Corrections
thumbs-up
1
similar_icon
Similar questions
View More
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
VAT
MATHEMATICS
Watch in App
Join BYJU'S Learning Program
CrossIcon