Question

Nitin purchase a machine costing 90000 and page 2000 on freight and cartage the rate of depreciation on machinery is is 10% how this transaction would be e shown in financial statement​

Answer 1

Answer:

Cost of machine 90000

Add: Freight 2000

Value of machine 92000

Purchase jornal entry

Machine a/c dr. 92000

To cash a/c 92000

[ being machinery purchased ]

Depreciation @ 10%

Depreciation will be charged to profit and loss a/c by 9200 ( 92000 × 10% )

Value of machine in Balance Sheet at the end of year

=> Value at beginning 92000

Less: depreciation 9200

Valie at the end 82800