Question

Q.1. Following is the information provided by the sole proprietor, Mr. Aakash Setn.
On 1st Apr, 2016, he purchased machinery worth 1,00,000.
On 1st July, 2016, he purchased machinery worth 50,000.
On 1st Oct, 2017, another machinery was purchased for 75,000.
Depreciation is provided on Straight Line Method basis @ 10% per annum. He closes the books on
31st March every year.
Prepare Machinery Account and Depreciation Account for 3 years. Give journal entries as well.​

Answer 1

Answer:yes

Explanation:

Machinery account is a real account. So debit what comes in and credit what goes out.

Year 1

Depreciation a/c 15000₹

Machinery a/c 15000₹

Value of machinery year 1: 150000-15000= 135000

Year2

Depreciation a/c 13500₹+7500₹

Machinery a/c 13500₹+7500₹

Value of machinery year 2: 135000+75000-(13500+7500)= 189000₹

Year3

Depreciation a/c 18900₹

Machinery a/c 18900₹

Value of machinery on year 3: 189000-18900=170100₹

Sorry, forgot that third machinery was purchased in the second year.