Question

Birla Cotton Mills purchased a machinery on 1st May, 1991 for Rs. 90,000. On 1st July, 1992 it purchased another machine for Rs. 40,000. On 31st March, 1993 it sold off the first machine purchased in 1991 for Rs. 58,000 and on the same date purchased a new machinery for Rs. 1,00,000.​

Answer 1

1 st may 1991

machinary alc ..dr 90000

1st July 1992

machinary alc Dr 40000

31st March 1993

machinary alc Dr 100000

31st March 1993

to sales alc 58000

Answer 2

Journal entry

Explanation:

We have pass journal entry in this Problem

we many times discussed BASIC RULES of accounts

Increase in Asset Debit

Decrease in Asset Credit

by follow above rules we pass the required following entry

                           In the books of Birla Cotton mills

Date                Particulars          LF        Dr.(Amount)             Cr.(Amount)

01 May          Machinery A/C       Dr.          90000  

1991                     To Cash A/C                                                  90000

                (Being machinery is purchased)

01 July          Machinery A/C       Dr.          40000  

1992                     To Cash A/C                                                  40000

                (Being machinery is purchased)    

31 March          Cash A/C       Dr.          58000  

1993                     To Machinery A/C                                                   58000

                (Being machinery is Sale)

31 March          Machinery A/C         Dr.          58000  

1993                     To Cash  A/C                                                   58000

                     (Being machinery is purchased)

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