Question

M/s Ameet traders, Wardha, Purchased machinery for Rs. 30,000 on 1st January, 2020.
In the same year on 1st October additional machinery was purchased for Rs. 40,000.
On 1st July, 2022, the machinery purchased on 1st January, 2020, was sold for Rs. 20,000 and on the same date new machinery was purchased for Rs. 20,000. M/s Ameet Traders charged depreciation at 10% p.a. on the original cost of machinery on 31st December every year.
Prepare Machinery Account for three years.​

Answer 1

Answer:

On 1st October, 2018, he sold the machine purchased on 1st April, 2017 for 4,000. It was decided that Depreciation @ 10% p.a. was to be written off every year under