Question

Question 15.
Following balances appear in the books of Priyank Brothers:

On 1st April, 2016, they decide to sell a machine for ₹ 5,00,000. This machine was purchased for ₹ 7,50,000 on 1st April, 2013. Prepare the Machinery Account and Provisin for Depreciation Account for the year ended 31st March, 2017 assuming that the firm has been charging Depreciation @ 10% p.a. on the Straight Line Method.

Answer 1

tryInsurance prepaid is ₹ 5,000.

(iii) Depreciate Machinery and Furniture @ 10% and 15% p.a. respectively. Machinery included a machine which was n the books of account. These goods were purchased paying IGST @

Answer 2

Machinery A/c with Provision for Depreciation A/c

Explanation:

                                   In the Books of Priyank Brothers

                                             Machinery A/c                                              

Particulars                Amount(Rs.)      Particulars         Amount(Rs.)      

1.4.16 To Bal b/d        2000000     1.4.16 By Prov. for Dep. 225000

                                                                 By Bank A/c          500000

                                                                 By P&L A/c(Loss)   25000

                                                        31.3.17 By Bal c/d          1250000

                                                                                                                     

                                           Provision for Depreciation A/c

Particulars             Amount(Rs.)         Particulars            Amount(Rs.)    

1.4.16 To Mach. A/c  225000        1.4.16 By Bal b/d          800000

31.3.17 To Bal. c/d     700000        31.3.17 By Dep. A/c      125000

                                                                                                             

*Working Notes:

1)Calculation of Profit/Loss on Sale of Machinery

Cost of Machinery                                      Rs.750000

Less:Accumulated Depreciation              (Rs.225000)

$(750000\times3\times10\%)$

                                                                                             

Book Value of Machinery                          Rs.525000

Less: Sales Value                                       (Rs.500000)

                                                                                                     

Loss on Sale                                                Rs.25000