Question

on 1st july 2006 vishal repurchased a machinery for ₹40000 on 31st October 2008 1/4th of the machinery which was purchased in 1st july 2006 was sold for ₹5600 as it become obselence on the same day company purchased another machinery for ₹15000 assuming the rate of depreciation at 10% p.a. on diminishing balance method prepare machinery account for the year ended 31st December 2009 company always closes it's books of accounts every 31st December of the year

Answer 1

(c) from the following transactions, identify the capital and revenue nature of

transactions along with reasons.

i. Sale of car

ii. Obtaining of license for running the business

iii. Legal fees paid to acquire the land, which is current assets for the proprietor

iv. Sale of old-furniture used in the business of the proprietor

v. Insurance expenses paid and the coverage period of the insurance is 5 years.