Question

Sunrise Ltd. had purchased machinery on 1st April, 2015 for 5,00,000. On Ist April, 2017,
the company sold a part of the machinery bought on 1st April, 2015 costing * 1,00,000 for
80,000 and selling expenses amounted to 2,000. Subsequently, on 1st October, in the
same year, the company bought new machinery for 58,000. Installation charges incurred
were * 2,000. The company used to charge depreciation @ 10% per annum on Diminishing
Balance Method and the accounts are closed on 31st March each year.
of 2015.16 to 2017-18​

Answer 1

Answer:

Balance in 'Provision for depreciation Account" as on 31.03.2015:-

= depreciation on unsold machinery + Depreciation on new machinery

= RS- 3,36,000 + RS-4,000

RS-3,40,000.

Working notes:-

1) Depreciation on existing machinery from 1.4.2012 to 31.03.2015 (3 years):-

= (12,00,000 - 80,000) 11,20,000 x 10/100 x 3 years

= RS-3,36,000

2) Depreciation on new machinery from 1.10.2014 to 31.03.2015 (6months)

= 80,000 x 10/100 x 6/12

= RS-4,000.

pls mark me brilliant fir my hard work