On 1st Jan 2014 Chroma Ltd purchased a machine for an amount of Rs 270000/- and spent Rs20000/- on its transportation and installation. On 1st July 2014 it purchased another machine for an amount of Rs180000/-. On 1st July 2015 it sold out the first machine for an amount of Rs225000/- and on the same date purchased another machine for an amount of Rs175000/-. On 1st July 2017 it sold out the second machine for an amount of Rs122000/-. Depreciation was provided on machinery @ 10% p.a on the original cost annually on 31st Dec. In 2016, however the company changed the method of depreciation and adopted written down value method @ 15% p.a. Give machinery account for four years commencing from acquisition of first machine.
Answers
Answer:
Dr Bus Account Cr
Date Particulars JF Amt.(Rs) Date Particulars JF Amt.(Rs)
2001 Jan 1 To Bank A/c 30,00,000 2001 Dec 31 By Depreciation A/c (@15%)
4,50,000
By Balance c/d 25,50,000
30,00,000 30,00,000
2002 Jan 1 To Balance b/d 25,50,000 2002 Dec 31 By Depreciation A/c (@ 15% on 25,50,000) 3,82,500
Dec 31 By Balance c/d 21,67,500
25,50,000 25,50,000
Date Particulars JF Amt.(Rs) Date Particulars JF Amt.(Rs)
2003 Jan 1 To Balance b/d 21,67,000 2003 Jul 1 By Depreciation A/c (6 months) 54,188
Jul 1 To Profit & Loss A/c (Profit) 31,688 Jul 1 By Bank A/c (Insurance Claim) 7,00,000
Dec 31 By Depreciation A/c 2,16,750
Dec 31 By Balance c/d 12,28,250
21,99,188 21,199,188
2004 Jan 1 To Balance b/d 12,28,250 2004 Dec 31 By Depreciation A/c (@15%) 1,84,237
Dec 31 By Balance c/d 10,44,013
12,28,250 12,28,250
Working Note
Cost of Accidental Bus on 1 Jan, 2003 =
3
21,67,500
= Rs. 7,22,500
Dep on Accidental Bus on 1 Jul, 2003 = 7,22,500 @ 15% for 6 months = Rs 54,188
Value of Bus as on 1 Jul, 2003 = 7,22,500−54,188 = Rs.6,68,312
Profit on Accidental Bus = 7,00,000−6,68,312=Rs.31,688
Dep on Rest Two Busses = (21,67,500−7,22,500) = Rs. 14,45,000
Dep =14,45,000@15% = Rs.2,16,750