Question

On 1.4.2008, Ram purchased a machine for 75,000. The Machinery is to be depreciated by 10% p.a. on the Fixed Installment Method and accounting year being April-March.

On 1.10.2010,some part of the machine costing: 10,000 was sold for 7,000. On the same date, a new Machine costing 10,000 was installed. Prepare Machinery Account and Provision for depreciation Account for three years.

Answer 1

Machinery

$\begin{array}{cccccccc}\text{Date}& \text{Particulars}& \text{L.F}& \text{Amount}& \text{Date}& \text{Particulars}& \text{L.F.}& \text{Amount}\\ & & & {(}^{\prime })& & & & {(}^{\prime })\\ 2008& & & & 2009& & & \\ \text{1 Apr.}& \text{To Bank A/c}& & \underset{–}{75,000}& \text{21 Mar}& \text{By Balance c/d}& & \underset{–}{75,000}\\ & & & \underset{–}{75,000}& & & & \underset{–}{75,000}\\ 2009& & & & 2010& & & \\ \text{1 Apr.}& \text{To Balance b/d}& & \underset{–}{75,000}& \text{31 Mar.}& \text{By Balance c/d}& & \underset{–}{75,000}\\ & & & \underset{–}{75,000}& & & & \underset{–}{75,000}\\ 2010& & & & 2010& & & \\ \text{1 Apr.}& \text{To Balance b/d}& & 75,000& \text{1 Oct.}& \text{By Prov. for Dep. A/c}& & 2,500\\ & & & & & \text{By Bank A/c}& & 7,000\\ & & & & 2011& & & \\ & & & & \text{31 Mar.}& \text{By Balance c/d}& & \underset{–}{65,000}\\ & & & \underset{–}{\overline{75,000}}& & & & \underset{–}{75,000}\\ 2011& & & & & & & \\ \text{1 Apr.}& \text{To Balance b/d}& & 65,000& & & & \end{array}$

Provision for Depreciation A/c

$\begin{array}{cccccccc}\text{Date}& \text{Particulars}& \text{L.F}& \text{Amount}& \text{Date}& \text{Particulars}& \text{L.F.}& \text{Amount}\\ & & & {(}^{\prime })& & & & {(}^{\prime })\\ 2009& & & & 2009& & & \\ \text{31 Mar.}& \text{To Balance c/d}& & \underset{–}{7,500}& \text{31 Mar.}& \text{By Depreciation A/c}& & \underset{–}{75,000}\\ & & & \underset{–}{75,000}& & & & \underset{–}{75,000}\\ 2010& & & & 2009& & & \\ \text{31 Mar.}& \text{To Balance c/d}& & 15,000& \text{1 Apr.}& \text{By Balance b/d}& & 75,000\\ & & & & 2010& & & \\ & & & & \text{31 Mar}& \text{By Depareciation A/c}& & \underset{–}{75,000}\\ & & & \underset{–}{\overline{15,000}}& & & & \underset{–}{15,000}\\ 2010& & & & 2010& & & \\ \text{1 Oct.}& \text{To Machinery A/c}& & 2,500& \text{1 Apr.}& \text{By Balance b/d}& & 15,000\\ & & & & \text{1 Oct.}& \text{By Depreciation}& & 500\\ 2011& & & & 2011& & & \\ \text{31 Mar.}& \text{To Balance c/d}& & \underset{–}{19,500}& \text{31 Mar.}& \text{By Depreciation A/c}& & \underset{–}{6,500}\\ & & & \underset{–}{22,000}& & & & \underset{–}{22,000}\\ & & & & 2011& & & \\ & & & & \text{1 Apr.}& \text{By Balance b/d}& & 19,500\end{array}$