Question

on 1-1-2010 a machinery was purchased for 8000. it was sold on 30-6-2013 for 6000. depreciation is charged at 10/ on original cost books are closed on 31 St December every year prepare machinery account and depreciation account for the above period
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Answer 1

Explanation:

depriciaton a/c 2010-2011 to balance b/d 8000

by depriciation 800

2011-2012 to balance c/d 7200

by depriciation 800

2012- 2013 to balance c/d 6400

by depriciation 400

2013 to balance c/d 6000. since the dpriciation will be charged on orignal cost it means it is straight line method i.e.10% of 8000 annually since in 2013 depriciation is charged for only six months i.e. 8000*10%/2=400

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