Question

Mohan purchased a machinery at 50000 on 1st January 2016 an other machinery purchased in 1st July same year 30000 he charges depreciation by straight line method you are required to prepare a account for three years charging depreciation @10% accounts are closed on 31st December every year

Answer 1

Answer:

SLM Method

Machine 1

purchased on 01 Jan

cost of Machine 50000

working Note:

• 1.01.16 (asset acq) 50,000
• 31.12.16 (depr.@10%). 5000

• 01.01.17. 45,000
• 31.12.17. (depr@10%) 5000

• 01.01.18. 40000
• 31.12.18. (depr@10%). 5000

• 01.01.19. 35000

Machine 2

purchased on 01 July

cost of Machine 30000

working Note:

1.07.16 (asset acq) 30,000

31.12.16 (depr.@10%*6/12). 1500

01.01.17. 28,500

31.12.17. (depr@10%) 3000

01.01.18. 25500

31.12.18. (depr@10%). 3000

01.01.19. 22500