1
You visited us 1 times! Enjoying our articles? Unlock Full Access!
Question

# On 1st July, 2015, A Co. Ltd. purchases second-hand machinery for ₹ 20,000 and spends ₹ 3,000 on reconditioning and installing it. On 1st January, 2016, the firm purchases new machinery worth ₹ 12,000. On 30th June, 2017, the machinery purchased on 1st January, 2016, was sold for ₹ 8,000 and on 1st July, 2017, a fresh plant was installed. Payments for this plant was to be made as follows: 1st July, 2017 ₹ 5,000 30th June, 2018 ₹ 6,000 30th June, 2019 ₹ 5,500 Payments in 2018 and 2019 include interest of ₹ 1,000 and ₹ 500 respectively. The company writes off 10% p.a. on the original cost. The accounts are closed every year on 31st March. Show the Machinery Account for the year ended 31st March, 2018.

Open in App
Solution

## Books of A. Co. Ltd Machinery Dr. Cr. Date Particulars J.F. Amount (₹) Date Particulars J.F. Amount (₹) 2015 2016 July 01 Bank (I) (20,000 + 3,000) 23,000 Mar.31 Depreciation 2016 I (for 9 months) 1,725 Jan.01 Bank (II) 12,000 II (for 3 months) 300 2,025 Mar.31 Balance c/d I 21,275 II 11,700 32,975 35,000 35,000 2016 2017 April 01 Balance b/d Mar.31 Depreciation I 21,275 I 2,300 II 11,700 32,975 II 1,200 3,500 Mar.31 Balance c/d I 18,975 II 10,500 29,475 32,975 32,975 2017 2017 April 01 Balance b/d June 30 Bank (II) 8,000 I 18,975 June 30 Depreciation (II) (for 3 months) 300 II 10,500 29,475 June 30 Profit and Loss (Loss) 2,200 July 01 Bank (III) 5,000 2018 July 01 Creditors for plant (III) 10,000 Mar.31 Depreciation I 2,300 III (on 15,000 for 8 months) 1,125 3,425 Balance c/d I 16,675 III 13,875 30,550 44,475 44,475 Working Notes 1. Calculation of Depreciation 2. Calculation of profit on loss on sale of Machine (II) Particulars Amount (Rs) Book Value of Machine (II) on April 01, 2017 10,500 Less: Depreciation for 3 Months (300) Book Value on June 30 10,200 Less: Sale (8,000) Loss on Sale 2,200

Suggest Corrections
34
Join BYJU'S Learning Program
Related Videos
Tax Computation
MATHEMATICS
Watch in App
Explore more
Join BYJU'S Learning Program