Question

Sharma & Co. whose books are closed on 31st March, purchased a machinery for ₹ 1,50,000 on 1st April, 2016, Additional machinery was acquired for ₹ 50,000 on 1st October, 2016. Certain machinery which was purchased for ₹ 50,000 on 1st October, 2016 was sold for ₹ 40,000 on 30th September, 2018.

Prepare the Machinery Account and Accumulated Depreciation Account for all the years up to the year ended 31st March, 2019. 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 (₹)	Date	Particulars	J.F.	Amount (₹)
2016					2017
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
2017					2018
Apr.01		Balance b/d		2,00,000	Mar.31	Balance c/d		2,00,000
				2,00,000				2,00,000
2018					2018
Apr.01		Balance b/d		2,00,000	Sep 30	Machinery Disposal A/c		50,000
					Mar.31,2019	Balance c/d		1,50,000
				2,00,000				2,00,000

Accumulated Depreciation Account
Dr.												Cr.
Date		Particulars			J.F.	Amount (₹)	Date	Particulars		J.F.	Amount (₹)
2017							2017
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
2018							2017
Mar.31		Balance c/d					Apr. 01	Balance b/d
		I	30,000					I	15,000
		II	7,500			37,500	2018	II	2,500		17,500
							Mar. 31	Depreciation
								I	15,000
								II	5,000		20,000
						37,500					37,500
2018							2018
Sep 30		Machinery disposal (II)				10,000	Apr. 01	Balance b/d
Mar.31, 2019		Balance c/d (I)				45,000		I	30,000
								II	7,500		37,500
							Sep 30	Depreciation (II)			2,500
							Mar. 31, 2019	Depreciation (I)			15,000
						55,000					55,000

Machinery Disposal Account
Dr.									Cr.
Date		Particulars	J.F.	Amount (₹)	Date	Particulars	J.F.	Amount (₹)
2018					2018
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 (₹)
Original Cost Oct 01, 2016	50,000
Less: Accumulated Depreciation	(10,000)
Book Value on Sept 30, 2018	40,000
Less: Sale Value	(40,000)
Profit / Loss	NIL