A company purchased a machinery costing RS 1,00,000 on january ,2006 . Additional machinery was purchased on 1st july , 2007 for rs 20,000 and on 1st april 2010 for rs 32,000 . A part of the machinery which originally cost RS 20,000 in 2006 was sold for RS 10,000 on 30th june , 2009.Show the machinery account for five years if depreciation is provided at 10% p.a. on the straight line method and accounts are closed on 31st december every year fully solved
Answers
Date particular amt Date particular amt
1/1/2006 To bank a/c 100000 31/12/2006 by dep(10%) 10000
31/12/2006 by balance c/d 90000
100000 100000
1/1/2007 To balance b/d 90000 31/12/2007 by dep(10%) 10000
1/7/2007 To bank a/c 20000 31/12/2007 by dep(10%) 1000
20000*10% 6/12
31/12/2007 by balance c/d 99000
110000 110000
1/1/2008 TO balance b/d 99000 31/12/ 2008 by dep (10%) 10000
31/12/2008 by dep(10%) 2000
20000*10%
31/12/2008 by balance c/d 87000
99000 99000
1/1/2009 To balance b/d 87000 31/12/2009 by dep(10%) 2000
31/12/2009 by dep(10%) 8600
30/6/2009 by dep(10%) 1000
30/6/2009 by p&L a/c 3000
30/6/2009 by sale a/c 10000
31/12/2009 by balance a/c 62400
87000 87000
1/1/2010 to balance b/d 62400 31/12/2010 by dep(10%) 8600
1/4/2010 To bank a/c 32000 31/12/2010 by dep(10%) 2000
31/12/2010 by dep(10%) 2400
(32000*10%
3200*9/12)
31/12/2010 by balance c/d 81400
94400 94400
1/1/2011 To balance b/d 81400
calculation of profit and loss account
original machinary value amt= 20000(purchase value)
sale amt = 10000
step1: calculation of depretion(sttaight line method)
1/1/2006 TO 30/6/2009
date: 1/1/2006 to 31/12/2006
20000*10%= 2000
date: 1/1/2007 to 31/12/2007
20000*10%= 2000
date 1/1/2008 to 31/12/2008
20000*10%=2000
date 1/1/2009 to 31/6/2009
20000*10% 6/12= 1000
total deprecition =2000+2000+2000+1000=7000
step2: original value - deprection
20000-7000=13000 that is the sale value of cost
step:3 orginal sale value - sale value
13000- 10000=3000
3000 is loss (profit and loss a/c)