Question

Depreciation n reserves


8
8. On 1st October 2014, Bansal Pvt. Ltd. purchased machinery for $12,00,000. On 31st May
2016, a part of the machinery purchased on 1st October 2014 for 31,60,000 was sold for
860,000. On the same date a fresh machinery was purchased for 33,00,000. Depreciation is
provided at 20% p.a. on the Written Down Value Method and the books are closed on 31st
March every year. You are required to prepare:
a. Machinery Account
b. Provision for Depreciation Account
c. Machinery Disposal Account

Answer 1

Answer:

Bansal Pvt. Ltd. purchased machinery for $12,00,000. On 31st May

2016, a part of the machinery purchased on 1st October 2014 for 31,60,000 was sold for

860,000. On the same date a fresh machinery was purchased for 33,00,000. Depreciation is

provided at 20% p.a. on the Written Down Value Method and the books are closed on 31st