5) Arun Traders, Nashik, Purchase machinery on 1st July 1984 for Rs. 14,000/- and decided to depreciate Machinery @ 10%p. a. Under the straight line Method On 1" Jan 1985 a new machinery was purchased Rs.20,000/- On 1st July 1986. a Machin- ery purchased on 1"July 1984 was sold for Rs.10,000/- and 31st Dec. 1986/- a new machinery was purchased for Rs.25,000/-. So prepare Machinery was purchased for Rs.25,000/-. So Machinery A/c for three year. Traders closes his accounts on 31" Dec. every year.
Answers
Answer: The account balance on the end of the three year is 46270.
Explanation:
We have to find Machinery A/c for first three year for Arun Traders.
Here Arun Traders purchased machine for 14000 on 1st July 1984
The accounts are closed on 31st Dec every year.
Depreciation value is @10%
The first year depreciation value is 700
The balance is 13300
The second year depreciation value is 1330
And also a new machine was purchased on 01-01-1985
So it will be added 20000
The balance is 33300
The third year depreciation value is 700
A machine was Sold for Rs. 10000 on 1st July 1984
A new machine was purchased for Rs, 25000 on 31st Dec 1986.
The balance is 46270
At the end of three years the balance is of the machinery account is 46270.
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