A Ltd. purchased a machine on April 1, 2015 at a cost of Rs. 8,000 and spent Rs. 2,000 on its installation. The firm writes off Depreciation @ 10% p.a. by written down value method. Calculate the amount of Depreciation to be charged for the first 3 years assuming books are closed on 31smarch
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Answers
Answer:
Date Particulars Amount (Rs) Date Particulars Amount (Rs)
2007 2008
Apr. 01 Bank A/c (1,90,000 + 10,000) 2,00,000 Mar. 31 Depreciation A/c 25,000
Mar. 31 Balance c/d 1,75,000
2,00,000 2,00,000
2008 2009
Apr. 01 Balance b/d 1,75,000 Mar. 31 Depreciation A/c 25,000
Mar. 31 Balance c/d 1,50,000
1,75,000 1,75,000
2009 2010
Apr. 01 Balance b/d 1,50,000 Mar. 31 Depreciation A/c 25,000
Mar. 31 Balance c/d 1,25,000
1,50,000 1,50,000
2010 2011
Apr. 01 Balance b/d 1,25,000 Mar. 31 Depreciation A/c 25,000
Mar. 31 Balance c/d 1,00,000
1,25,000 1,25,000
Depreciation Account
Dr. Cr.
Date Particulars Amount (Rs) Date Particulars Amount (Rs)
2008 2008
Mar. 31 Machinery A/c 25,000 Mar. 31 Profit and Loss A/c 25,000
25,000 25,000
2009 2009
Mar. 31 Machinery A/c 25,000 Mar. 31 Profit and Loss A/c 25,000
25,000 25,000
2010 2010
Mar. 31 Machinery A/c 25,000 Mar. 31 Profit and Loss A/c 25,000
25,000 25,000
2011 2011
Mar. 31 Machinery A/c 25,000 Mar. 31 Profit and Loss A/c 25,000
25,000 25,000
Working Note: Calculation of Depreciation