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Question
A firm acquired a machine on 1st April 2015 at a cost of ₹ 50,000. Its life is 6 years. The firm writes off depreciation @ 30% p.a. on the diminishing balance method. The firm closes its books on 31st December every year. Show the machinery account and depreciation account for three years starting from 1st April 2015.
Solution
| Date | Particulars | ₹ |
| 01.04.2015 | Machinery purchased | 50,000 |
| 31.12.2015 | Less: Depreciation @ 30% | 11,250 |
| 01.01.2016 | Book value | 38,750 |
| 31.12.2016 | Less: Depreciation @ 30% | 11,625 |
| 01.01.2017 | Book value | 27.125 |
| 31.12.2017 | Less: Depreciation @ 30% | 8,138 |
| 01.01.2018 | Book value | 18,987 |
Machinery A/c
| Dr. | Cr. | ||||||
| Date | Particulars | L.F. | ₹ | Date | Particulars | L.F. | ₹ |
| 01.04.15 | To Bank A/c | 50,000 | 31.12.15 | By Depreciation A/c | 11,250 | ||
| 31.12.15 | By Balance c/d | 38,750 | |||||
| 50,000 | 50,000 | ||||||
| 01.01.16 | To Balance b/d | 38,750 | 31.12.16 | By Depreciation A/c | 11,625 | ||
| 31.12.16 | By Balance c/d | 27,125 | |||||
| 38,750 | 38,750 | ||||||
| 01.01.17 | To Balance b/d | 27,125 | 31.12.17 | By Depreciation A/c | 8,138 | ||
| 31.12.17 | By Balance c/d | 18,987 | |||||
| 27,125 | 27,125 | ||||||
| 01.01.18 | To Balance b/d | 18,987 | |||||
Depreciation A/c
| Dr. | Cr. | ||||||
| Date | Particulars | L.F. | ₹ | Date | Particulars | L.F. | ₹ |
| 31.12.15 | To Machinery A/c | 11,250 | 31.12.15 | By P & L A/c | 11,250 | ||
| 11,250 | 11,250 | ||||||
| 31.12.16 | To Machinery A/c | 11,625 | 31.12.16 | By P & L A/c | 11,625 | ||
| 11,625 | 11,625 | ||||||
| 31.12.17 | To Machinery A/c | 8,138 | 31.12.17 | By P & L A/c | 8,138 | ||
| 8,138 | 8,138 | ||||||
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