Question

Question 24.
On 1st April, 2015, a machinery was purchased for ₹ 20,000. On 1st October, 2016 another machine was purchased for ₹ 10,000 and on 1st April, 2017, one more machine was purchased for ₹ 5,000. The firm depreciates its machinery @ 10% p.a. on the Diminishing Balance Method.
What is the amount of Depreciation for the years ended 31st March, 2016; 2017 and 2018? What will be the balance in Machinery Account as on 31st March, 2018?

Answer 1

The amount of depreciation for the years 2016, 2017 and 2018 are 2000, 2300 and 3070.

Explanation:

• The value of purchases made during the years are as such 20,000 18,000 10,000 16,200 9500 and 5000.
• Depreciation is a term used in accountancy.
• It has two different aspects.
• There are around three different types of depreciation.
• This is a type of non-cash expense.

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