Mohan acquired on lease basis a Building for 3 10,000/- for five years from 1st Jan 2005. He
decided to provide for depreciation by annuity method charging interest at 10% p.a. The
Annuity Table shows that an investment of 3 1/- at 10% for 5 years yields 0.2638/- every
year for 5 years, Books are closed as 31" Dec each year,
Show Calculation of annual depreciation & Lease Alc for 5 years.
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On 1st July, 2008 a company purchased a machine for Rs 3,90,000 and spent Rs 10,000 on its installation. It decided to provide depreciation @ 15% per annum, using written down value method. On 30th November, 2011 the machine was dismantled at a cost of Rs 5,000 and then sold for Rs 1,00,000.
Explanation:
On 1st December, 2011 the company acquired and put into operation a new machine at a total cost of Rs 7,60,000. Depreciation was provided on the new machine on the same basis as had been used in the case of the earlier machine. The company closes its books of account every year on 31st March.
Prepare Machinery Account and Depreciation Account for four accounting years ended 31st March. 2012:
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