Question

question

On 1/7/2007, Z Ltd purchased Machinery costing 108,000. On Ist october 2010 company sold 1/4 part of
Machinery for Rs. 5,000. Prepare Machinery accounting for 2007 to 31-3-2011 While depreciation charged on
assets 10% p.a. on Straight line method. Company dosed his account 31st December of each year. ​

Answer 1

Explanation:

ANSWER

Answer

Dr Machinery Account Cr

Date Particulars JF Amt. (Rs) Date Particulars JF Amt. (Rs)

2000 Jul 1 To Bank A/c 1,20,000 2000 Dec 31 By Depreciation A/c 4,500

Dec 31 By Balance c/d 1,15,500

1,20,000 1,20,000

2001 Jan 1 To Balance b/d 1,15,500 2001 Dec 31 By Depreciation A/c 9,000

Dec 31 By Balance c/d 1,06,500

1,15,500 1,15,500

2002 Jan 1 To Balance b/d 1,06,500 2002 Dec 31 By Depreciation A/c 9,000

Dec 31 By Balance c/d 97,500

1,06,500 1,06,500

2003 Jan 1 To Balance b/d 97,500

Dr Depreciation Account Cr

Date Particulars JF Amt. (Rs) Date Particulars JF Amt (Rs)

2000 Dec 31 To Machinery A/c

4,500 2000 Dec 31 By Profit & Loss A/c 4,500

4,500 4,500

2001 Dec 31 To Machinery A/c 9,000 2001 Dec 31 By Profit & Loss A/c 9,000

9,000 9,000

2002 Dec 31 To Machinery A/c 9,000 2002 Dec 31 By Profit & Loss A/c 9,000

9,000 9,000

Working Note

Computation of Annual Amount of Depreciation =

12

(1,08,000+12,000−12,000)

=9,000

For the first year, machine has been used for half year that's why half depreciation has been charged i.e., Rs 4,500.