Question

On 1st April, 2015, Amit Kumar purchased five machines for ₹ 60,000 each. Depreciation @ 10% p.a. on initial cost has been charged from the Profit and Loss Account and credited to Provision for Depreciation Account.
On 1st April, 2016, one machine was sold for ₹ 50,000 and on 1st April, 2017 another machine was sold for ₹ 50,000. An improved model costing ₹ 1,00,000 was purchased on 1st October, 2016. IGST was paid @ 12%. Amit Kumar closes his books on 31st March each year.
You are required to show: (i) Machinery Account: (ii) Machinery Disposal Account and (iii) Provision for Depreciation Account for the period of three accounting years ended 31st March, 2018.

Answer 1

Books of Amit Kumar Machinery Account
Dr.											Cr.
Date		Particulars		J.F.	Amount (Rs)	Date	Particulars		J.F.	Amount (Rs)
2015						2016
April 01		Bank (I) (5 machines @ Rs 60,000 each)			3,00,000	Mar.31	Balance c/d			3,00,000
					3,00,000					3,00,000
2016						2016
April 01		Balance b/d			3,00,000	April 01	Machinery Disposal			60,000
Oct.01		Bank (II)			1,00,000	2017
						Mar.31	Balance c/d
							I	2,40,000
							II	1,00,000		3,40,000
					4,00,000					4,00,000
2017						2017
April 01		Balance b/d				April 01	Machinery Disposal			60,000
		I	2,40,000			2018
		II	1,00,000		3,40,000	Mar.31	Balance c/d
							I	1,80,000
							II	1,00,000		2,80,000
					3,40,000					3,40,000

Provision for Depreciation Account
Dr.												Cr.
Date		Particulars			J.F.	Amount (Rs)	Date	Particulars		J.F.	Amount (Rs)
2016							2016
Mar.31		Balance c/d				30,000	Mar.31	Depreciation I			30,000
						30,000					30,000
2016							2016
April 01		Machinery Disposal				6,000	April 01	Balance b/d (I)			30,000
		(Accumulated Depreciation on Machinery Costing Rs 60,000)
2017							2017
Mar.31		Balance c/d					Mar.31	Depreciation
		I	48,000					I	24,000
		II	5,000			53,000		II(for 6 months)	5,000		29,000
						59,000					59,000
2017							2017
April 01		Machinery Disposal				12,000	April 01	Balance b/d
		(Accumulated Depreciation on Machinery Costing Rs 60,000)						I	48,000
								II	5,000		53,000
2018							2018
Mar.31		Balance c/d					Mar.31	Depreciation
		I		54,000				I	18,000
		II		15,000		69,000		II	10,000		28,000
						81,000					81,000

Machinery Disposal Account as on April 01, 2016
Dr.									Cr.
Date		Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
2016					2016
April 01		Machinery		60,000	April 01	Provision for Depreciation		6,000
					April 01	Bank		50,000
					April 01	Profit and Loss (Loss) (Balancing Figure)		4,000
				60,000				60,000

Machinery Disposal Account as on April 01, 2017
Dr.									Cr.
Date		Particulars	J.F.	Amount (Rs)	Date	Particular	J.F.	Amount (Rs)
2017					2017
April 01		Machinery		60,000	April 01	Provision for Depreciation		12,000
April 01		Profit and Loss (Profit) (Balancing Figure)		2,000	April 01	Bank		50,000
				62,000				62,000