A company had a balance of Rs.4,0,5000 on 1stJanuary ,2018 in its machinery
account ,10% per annum depreciation was charged by diminishing balance method
.On the 1st July ,2018 the company sold a part of the machinery for Rs.87,500 ( which
was purchased on 1st January ,2016 for Rs.1,20,000) and on the same date , the
company purchased a new machinery for Rs.2,50,000 .On 31st December ,2018 the
directors of the company decided to adopt the fixed instalment method of
depreciation as per AS-10( Revised) instead of diminishing balance method; the rate
of depreciation remaining the same.
Prepare Machinery Account in the books of the company for the year ended ,2018.
Answers
A company had a balance of Rs.4,0,5000 on 1stJanuary ,2018 in its machinery account ,10% per annum depreciation was charged by diminishing balance method .On the 1st July ,2018 the company sold a part of the machinery for Rs.87,500 ( which was purchased on 1st January ,2016 for Rs.1,20,000) and on the same date , the company purchased a new machinery for Rs.2,50,000 .On 31st December ,2018 the directors of the company decided to adopt the fixed instalment method of depreciation as per AS-10( Revised) instead of diminishing balance method; the rate of depreciation remaining the same.Prepare Machinery Account in the books of the company for the year ended ,2018.
Answer:
Explanation:
MACHINERY A/C
To bal b/d 405000 By Bank A/c 875000
To Bank A/c 250000 By P&l A/c 4840
By Depreciation 4860
By Additional Dep 3800
By Dep A/c
38000
25000 63000
By balance C/d
Machinery 1 266000
Machinery 2 237500 503500
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655000 655000