Question

Question 8.
Open a ‘T’ shape account for machinery and put the following transactions on the proper side:

Answer 1

Machinery A/c with all the given transactions

Explanation:

                                       Machinery A/c

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

To Cash or         40,000               By Disposal of     10,000

Bank A/c                                        Machinery A/c

To Cash A/c         8,000               By Depreciation  14,000

                                                       Fund A/c

                                                      By Depreciation    1,000

                                                       Fund A/c

                                                      By Balance c/d      23,000

                                                                                                   

                     48,000                                                 48,000

                                                                                                           

•  Notes: 1) Disposal of Machinery has been transferred to Depreciation Fund A/c as per the latest provisions of Accounting Standard:10 Property,Plant and Equipment.
• 2) 2 more accounts could have also been prepared,named as "Depreciation Fund" and "Provision for depreciation",but there was not a need to make them here.Prepare these accounts only if the asset is given at cost in balance sheet or Depreciation is already given in the Balance sheet.                                        

Answer 2

Explanation:

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