Question

Vinod Ltd., purchased a Machine on 1st January,2007 for Rs.19,400 and spent Rs.600 on its installation.On 1st July, in the same year additional machinery costing Rs.10,000 was acquired.On 1st July, 209 the machinery purchased on January 1,2007 having become useless was auctioned for Rs.8,000 and on the same date new machine was purchased at a cost of Rs.15,000.Depreciation is provided annually on 31st December @ 10% per annum on Original Cost of assets Prepare Machinery Account from 2007 to 2010.

Answer 1

Machinery Account:

$\begin{array}{cccccc}\text{Date}& \text{Particulars}& \text{Amount}& \text{Date}& \text{Particulars}& \text{Amount}\\ \text{2007}& & & \text{2007}& & \\ \text{Jan.1}& \text{To Bank}& 20,000& \text{Dec.31}& \text{By Depreciation A/c}& 2,500\\ \text{July 1}& \text{To Bank}& 30,000& & \text{By Balance c/d}& 27,500\\ & & \overline{\underset{–}{30,000}}& & & \overline{\underset{–}{30,000}}\\ \text{2008}& & & \text{2008}& & \\ \text{Jan.1}& \text{To Balance b/d}& 27,500& \text{Dec 31}& \text{By Depreciation A/c}& 3,000\\ & & & \text{Dec 31}& \text{By Balance c/d}& 24,500\\ & & \overline{\underset{–}{27,500}}& & & \overline{\underset{–}{27,500}}\\ \text{2009}& & & \text{2009}& & \\ \text{Jan.1}& \text{To Balance b/d}& 24,500& \text{July 1}& \text{By Bank}& 8,000\\ \text{July 1}& \text{To Bank A/c}& 15,000& & \text{By Depreciation A/c}& 1,000\\ & & & & \text{By P/L A/c}& 7,000\\ & & & \text{Dec 31}& \text{By Depreciation A/c}& 1,750\\ & & & & \text{By Balance c/d}& 21,750\\ & & \overline{\underset{–}{39,500}}& & & \overline{\underset{–}{39,500}}\\ \text{2010}& & & \text{2010}& & \\ \text{Jan 1}& \text{To Balance b/d}& 21,750& \text{Dec 31}& \text{By Depreciation A/c}& 2,500\\ & & & & \text{By Balance c/d}& 19,250\\ & & \overline{21,750}& & & \overline{21,750}\end{array}$