A company purchased second hand machinery on 1.4.2013
for Rs. 3,70,000 and immediately spent Rs. 20,000 on its repairs
and Rs. 10,000 on installation and decided to depreciate on the
written down value method at 10% p.a. On 1.10.2014, it purchased
another machine for Rs. 1,00,000 and on 1.10.2015, it sold off
the first machine purchased in the year 2013, for Rs. 2,80,000.
On the same date, it purchased a machinery for Rs.2,50,000. On
1.10.2016, the second machinery it purchased for Rs. 1,00,000
on 1.10.2014 was sold off for Rs. 20,000.
Show the Machinery Account for 4 years, assuming that the
accounts are closed annually on 31st March each year.
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Answer:
Purchase Price of machine = 20,00,000
Installation charges = 5,00,000
Total cost of machine = 25,00,000
Depreciation = 25,00,000*10/100
= 2,50,000
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