Question

Goods and Services Tax (GST)
Modern Ltd. purchased a machinery on 1st August, 2016 for ₹60,000. On 1st October,
2017. it purchased another machine for ₹20000 plus CGST and SGST @ 6% each. On 30th
June 2018 it sold the first machine purchased in 2016 for ₹38500 charging IGST @ 12%.
Depreciation is provided @ 20% p.a. on the original cost each year. Accounts are closed on 31st March every year. Prepare the Machinery Account for three years.​

Answer 1

Answer:

The Machine account for 3 years is shown below:

Explanation:

Working Notes:

Annual Depreciation for machines is as:

For Machine 1 = Cost of Machine * Depreciation rate

                        = Rs 60,000 * 20%

                        = Rs 12,000

For Machine 2 = Cost of Machine * Depreciation rate

                        = Rs 20,000 * 20%

                        = Rs 4,000

Depreciation for Machinery 2 for 6 months = Rs4,000 * 6/12

                                                                        = Rs 2,000