Question 23.
A company purchased a machinery for ₹ 50,000 on 1st October, 2015. Another machinery costing ₹10,000 was purchased on 1st December, 2016. On 31st March, 2018, the machinery purchased in 2015 was sold at a loss of ₹ 5,000. The company charges depreciation @ 15% p.a. on Diminishing Balance Method. Accounts are closed on 31st March every year. Prepare the Machinery Account for 3 years.
Answers
Answer:
on credit and drew 3 bills on him first bill for ₹ 1,000 for 1 month, second bill for ₹ 1,500 for 2 months and third bill for ₹ 2,000 for 3 months. Mr. Y accepted and returned all the bills to Mr. X.
The first bill was retained by Mr. X till the date of maturity. Second bill was endorsed to his creditor Mr. Z on accepted by the latter payable at the New Bank of India. Show what entries should be passed in the books of A under each of the following circumstances:
(a) If A retained the bill till the due date and then realized it on maturity.
(b) If A discounted it with his bankers for ₹ 950.
(c) If A endorsed it to his creditor C in full settlement of his debt.
(d) If A sent it to his bankers for collection.
Also, give the necessary entries in each of the cases if the bill is
Machinery A/c for the next 3 years
Explanation:
Machinery A/c
Particulars Amount(Rs.) Particulars Amount(Rs.)
1.10.15 3.3.16
To Bank A/c 50,000 By Dep A/c(6m) 3750
(Mach 1) By Bal c/d 46250
50,000 50,000
1.4.16 To Bal b/d 46250 31.3.17 By Dep A/c
Mach 1 6938
Mach 2 500
1.12.16 To Bank A/c 10,000 By Bal c/d 48812
(Mach 2)
56250 56250
1.4.17 To Bal b/d 48812 31.3.18 By Dep A/c
Mach 1 5897
Mach 2 1425
By Bank A/c 5000
(Mach 1)
By P&L A/c(Loss) 28415
By Bal c/d 8075
48812 48812