Question

Depreciation questions related to addition and sale of assets

Answer 1

What u are asking may be this
(a) Depreciation under Fixed Instalment Method; (b) Assets purchased on different dates, (C) Sale of Asset, (d) Loss on Sale

B. Co. Purchased machinery as follows :

Date of Purchase Cost of Machine (Rs.)

1.4.2006 → 60,000
1.10.2006→ 40,000
1.7.2007 →20,000



On 1.1.2008 one-third of the machinery which was purchased on 1.4.2006 became obsolete and was sold for Rs. 6,000. The machinery was to be depreciated by Fixed Instalment Method at
10% p a.

Show how the Machinery Account would appear in the ledger of the Company for the years
2006. 2007 and 2008. Assume that the accounting year of the Company ends on 31st December
every year