Question

On 1st January 2003 Mr karim purchased for Rs. 17,000 and spent Rs. 3000 on its
installation. On 30th June 2006 the machinery was disposed of a sum of Rs
12000 assuming the boos are closed on 31st December each year and adopting
the date of Depreciation at 10% p.a. on the diminishing balance method show the
machinery account for four year.

Answer 1

Answer:

Explanation:

Karim  purchased on = Rs. 17000

Spend = 3000

Total value of the machine is 20,000

Rate of depreciation = 10%

1 year - Cost of Machine =  20000

Less : Depreciation = 2000

                                                                           

2 year Book value of machine = 18000

Less : Depreciation = 1800

                                                                                     

3 year Book value of machine = 16200

Less : Depreciation = 1620

4 th year Book value of machine = 14580