Question

From the following particulars, prepare Machinery Account for 3 years under:
(1) SLM and
(i) WDV method of charging depreciation :
Price of the Machine : Rs. 36,000
Freight charges : Rs. 2,500
Installation charges : Rs. 1,500
Life of the Machine : 5 years.​

Answer 1

Given : Price of the Machine = Rs. 36,000

Other Charges = 2500 + 1500 = 4000

           Life of the Machine = 5 years.​

To Prepare: Machinery Account for 3 years under SLM and WDM.

Solution:

   Working Notes :-

Amount of Depreciation =  $\frac{36,000 + 2500 + 1500}{5}$

                                         = 8,000

                                       

Rate of Depreciation = $\frac{8000}{40000}$ × 100

                                    = 20% p.a.

                                 

Pls refer to the attached pic for Machinery Account