Question

Sharma & Co. whose books are closed on 31st March, purchased a machinery for ₹ 1,50,000 on 1st April, 2015, Additional machinery was acquired for ₹ 50,000 on 1st October, 2015. Certain machinery which was purchased for ₹ 50,000 on 1st October, 2015 was sold for ₹ 40,000 on 30th September, 2017.

Prepare the Machinery Account and Accumulated Depreciation Account for all the years up to the year ended 31st March, 2018. Depreciation is charged @ 10% p.a. on Straight Line Method. Also, show the Machinery Disposal Account.

Answer 1

Books of Sharma & Co. Machinery Account
Dr.									Cr.
Date		Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
2015					2016
Apr.01		Bank (I)		1,50,000
Oct 01		Bank (II)		50,000	Mar.31	Balance c/d		2,00,000
				2,00,000				2,00,000
2016					2017
Apr.01		Balance b/d		2,00,000	Mar.31	Balance c/d		2,00,000
				2,00,000				2,00,000
2017					2017
Apr.01		Balance b/d		2,00,000	Sep 30	Machinery Disposal A/c		50,000
					Mar.31,2018	Balance c/d		1,50,000
				2,00,000				2,00,000

Accumulated Depreciation Account
Dr.												Cr.
Date		Particulars			J.F.	Amount (Rs)	Date	Particulars		J.F.	Amount (Rs)
2016							2016
Mar.31		Balance c/d					Mar. 31	Depreciation
		I		15,000				I	15,000
		II		2,500		17,500		II (for 6 months)	2,500		17,500
						17,500					17,500
2017							2016
Mar.31		Balance c/d					Apr. 01	Balance b/d
		I	30,000					I	15,000
		II	7,500			37,500	2017	II	2,500		17,500
							Mar. 31	Depreciation
								I	15,000
								II	5,000		20,000
						37,500					37,500
2017							2017
Sep 30		Machinery disposal (II)				10,000	Apr. 01	Balance b/d
Mar.31, 2018		Balance c/d (I)				45,000		I	30,000
								II	7,500		37,500
							Sep 30	Depreciation (II)			2,500
							Mar. 31, 2018	Depreciation (I)			15,000
						55,000					55,000

Machinery Disposal Account
Dr.									Cr.
Date		Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
2017					2017
Sep 30		Machinery		50,000	Sep 30	Accumulated Depreciation		10,000
					Sep 30	Bank		40,000
				50,000				50,000

Working note

1. Calculation of Profit or Loss on sale of Machine II:

Particulars	Amount (Rs)
Original Cost Oct 01, 2015	50,000
Less: Accumulated Depreciation	(10,000)
Book Value on Sept 30, 2017	40,000
Less: Sale Value	(40,000)
Profit / Loss	NIL