Question

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.

Answer 1

Machinery Account
Dr.				Cr.
Date	Particulars	Amount (₹)	Date		Particulars	Amount (₹)
2015			2016
Apr. 01	Bank A/c (1,90,000 + 10,000)	2,00,000	Mar. 31		Depreciation A/c	25,000
			Mar. 31		Balance c/d	1,75,000
		2,00,000				2,00,000
2016			2017
Apr. 01	Balance b/d	1,75,000	Mar. 31		Depreciation A/c	25,000
			Mar. 31		Balance c/d	1,50,000
		1,75,000				1,75,000
2017			2018
Apr. 01	Balance b/d	1,50,000	Mar. 31		Depreciation A/c	25,000
			Mar. 31		Balance c/d	1,25,000
		1,50,000				1,50,000
2018			2019
Apr. 01	Balance b/d	1,25,000	Mar. 31		Depreciation A/c	25,000
			Mar. 31		Balance c/d	1,00,000
		1,25,000				1,25,000

Depreciation Account
Dr.				Cr.
Date	Particulars	Amount (₹)	Date		Particulars	Amount (₹)
2016			2016
Mar. 31	Machinery A/c	25,000	Mar. 31		Profit and Loss A/c	25,000
		25,000				25,000
2017			2017
Mar. 31	Machinery A/c	25,000	Mar. 31		Profit and Loss A/c	25,000
		25,000				25,000
2018			2018
Mar. 31	Machinery A/c	25,000	Mar. 31		Profit and Loss A/c	25,000
		25,000				25,000
2019			2019
Mar. 31	Machinery A/c	25,000	Mar. 31		Profit and Loss A/c	25,000
		25,000				25,000

Working Note: Calculation of Depreciation