Question

On 1st april , 2009 squash co. ltd bought a machinery for rs.75000 and spent for installation charges rs.10000 , import duty rs.10000 and for transportation rs.5000 . On 1st feb spent for repairing charges rs.1000 , the life of the machinery if 5 yrs . find depreciation and prepare machinery account

Answer 1

Dear Student, the solution to your query is as follows.
$$\begin{gathered} \mathrm{Depreciation}=\frac{\mathrm{Machinery}\mathrm{Purchased}+\mathrm{Installation}\mathrm{Charges}+\mathrm{Import}\mathrm{Duty}+\mathrm{Transportation}\mathrm{Charges}}{\mathrm{Estimated}\mathrm{Useful}\mathrm{Life}\mathrm{of}\mathrm{the}\mathrm{Machinery}} \\ \mathrm{Depreciation}=\frac{75,000+10,000+10,000+5,000}{5}=\mathrm{Rs}20,000 \end{gathered}$$

Machinery Account
Dr.				Cr.
Date	Particulars	Amount (Rs)	Date		Particulars	Amount (Rs)
2009			2010
Apr. 01	Bank A/c	1,00,000	Mar. 31		Depreciation A/c	20,000
	(75,000 + 10,000 + 10,000 + 5,000)		Mar. 31		Balance c/d	80,000
		1,00,000				1,00,000
2010			2011
Apr. 01	Balance b/d	80,000	Mar. 31		Depreciation A/c	20,000
			Mar. 31		Balance c/d	60,000
		80,000				80,000
2011			2012
Apr. 01	Balance b/d	60,000	Mar. 31		Depreciation A/c	20,000
			Mar. 31		Balance c/d	40,000
		60,000				60,000
2012			2013
Apr.01	Balance b/d	20,000	Mar. 31		Depreciation A/c	20,000
			Mar. 31		Balance c/d	20,000
		20,000				20,000
2013			2014
Apr.01	Balance b/d	20,000	Mar. 31		Depreciation A/c	20,000
		20,000				20,000