(b) Books of Mr. A shows balance of ₹1,15,340 in machinery account on 1.4.19. A machine which was purchased on 1.4.17 for Rs 80,000/- & was sold on 1.10.19 for ₹60,000. There was another machine purchased on 1.10.18. A third machine was purchased for ₹40,000 on 1.7.19 and a fourth machine for *30,000 was purchased on 1.1.20. Depreciation was calculated every year 15% p.a. on W.D.V. Calculate the cost of II machine purchased and prepare machinery A/c. for the year 2019-20.
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Answer:
here is your answer.
i hope you understand.
We calculate depreciation on machinery to reduce its value in the books because of time and other things. there are two methods to calculate depreciation which are straight line method and written down value method.
1) Machinery a/c balance on 1.4.19 = ₹1,15,340
2) machinery purchased on 1.4.17 = ₹80,000 , sold for ₹60,000 on 1.10.19
depreciation on this machinery for 2 years and 6 months =
depreciation for 1 year = 80,000* 15/100 = 12,000
depreciation for 2 year = ( 80,000 - 12,000 )* 15/100 = 10,200
depreciation for 6 months = ( 80,000 - 12000 - 10,200)* 15/100* 6/12 =
= 4,335
total depreciation on this machinery = 12,000 + 10,200 + 4,335 = 26,535
3) machinery purchased on 1.10.18 = ₹80,000
depreciation on this machinery for 1 year and 6 months =
depreciation of 6 months = 80,000*15/100*6/12 = 6000
depreciation of 1 year = (80,000 - 6,000) * 15/100 = 11,100
total depreciation on this machinery = 6000 + 11,100 = 17,100
4) machinery purchased on 1.7.19 = 40,000
depreciation for 9 months = 40,000 * 15/100 * 9/12 = 4,500
5) machinery purchased on 1.1.20 = 30,000
depreciation for 3 months = 30,000 * 15/100 * 3/12 = 1,125
total depreciation for the year = 26,535 + 17,100 + 4,500 + 1,125
= 49,260