Question 34.
Sharma & Co. whose books are closed on 31st March, purchased a machinery for ₹ 1,50,000 on 1st April, 2015, Additional machinery was acquired for ₹ 50,000 on 1st October, 2015. Certain machinery which was purchased for ₹ 50,000 on 1st October, 2015 was sold for ₹ 40,000 on 30th September, 2017.
Prepare the Machinery Account and Accumulated Depreciation Account for all the years up to the year ended 31st March, 2018. Depreciation is charged @ 10% p.a. on Straight Line Method. Also, show the Machinery Disposal Account.
Answers
Relevant A/cs in the Books of Sharma and Co.
Explanation:
In the Books of Sharma and Co.
Machinery A/c
Particulars Amount(Rs.) Particulars Amount(Rs.)
1.4.15 To Bank A/c(I) 150000 31.3.16 By Balance c/d 200000
1.8.15 To Bank A/c(II) 50000
200000 200000
1.4.17 To Balance b/d 200000 30.9.17 By Mach. Disposal:
Mach II 50000
31.3.2018 By Balance c/d 150000
200000 200000
Accumulated Depreciation A/c
Particulars Amount(Rs.) Particulars Amount(Rs.)
31.3.16 To Bal c/d 31.3.16 By Dep. A/c
Mach I 15000 Mach 1 15000
Mach II 2500 Mach II 2500
31.3.17 To Bal c/d 31.3.16 By Bal b/d
Mach 1 30000 Mach I 15000
Mach II 7500 Mach II 2500
31.3.17 By Dep. A/c
Mach I 15000
Mach II 5000
30.9.17 To Mach. 10000 1.4.17 By Bal b/d
Disposal A/c Mach I 30000
Mach II 7500
31.3.18 To Bal c/d 45000 30.9.17 By Dep. A/c
Mach II 2500
31.3.2018 By Dep. A/c
Mach I 15000
55000 55000
Machinery Disposal A/c
Particulars Amount(Rs.) Particulars Amount(Rs.)
30.9.17 To Machinery A/c 50000 30.9.17 By Acc. Dep. 10000
By Bank A/c 40000
50000 50000
*Working Notes:
I) Calculation of Profit/Loss on sale of Mach II
Original Cost of Machinery as on 1.8.15 Rs.50000
Less: Accumulated Depreciation (Rs.10,000)
Book value on 30.9.17 Rs.40,000
Less:Sales Value (Rs.40,000)
Profit/Loss -