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Question
Ragul purchased machinery on April 1, 2014 for ₹ 2,00,000. On 1st October 2015, a new machine costing ₹ 1,20,000 was purchased. On 30th September 2016, the machinery purchased on April 1, 2014 was sold for ₹ 1,20,000. Books of accounts are closed on 31st March and depreciation is to be provided at 10% p.a. on straight line method. Prepare machinery account and depreciation account for the years 2014-15 to 2016-17.
Solution
Machinery Account
| Dr. | Cr. | ||||||
| Date | Particulars | J.F. | Amount ₹ | Date | Particulars | J.F. | Amount ₹ |
| 01.04.2014 | To Bank A/c | 2,00,000 | 31.03.2015 | By Depreciation A/c | 20,000 | ||
| 31.03.2008 | By Balance c/d | 1,80,000 | |||||
| 2,00,000 | 2,00,000 | ||||||
| 01.04.2015 | To Balance b/d | 1,80,000 | 31.03.2016 | By Depreciation A/c | 26,000 | ||
| 01.10.2015 | To Bank A/c | 1,20,000 | 31.03.2016 | By Balance c/d | 2,74,000 | ||
| 3,00,000 | 3,00,000 | ||||||
| 01.04.2016 | To balance b/d | 2,74,000 | 30.09.2016 | By Depreciation A/c | 10,000 | ||
| 30.09.2016 | By Bank A/c | 1,20,000 | |||||
| 30.09.2016 | By Profit or Loss A/c | 30,000 | |||||
| 03.03.2017 | By Depreciation A/c | 12,000 | |||||
| 03.03.2017 | By balance c/d | 1,02,000 | |||||
| 2,74,000 | 2,74,000 | ||||||
| 01.04.2017 | To balance b/d | 1,02,000 |
Depreciation Account
| Dr. | Cr. | ||||||
| Date | Particulars | J.F. | Amount ₹ | Date | Particulars | J.F. | Amount ₹ |
| 31.03.2015 | To Machinery A/c | 20,000 | 31.03.2015 | By Profit/Loss A/c | 20,000 | ||
| 20,000 | 20,000 | ||||||
| 31.03.2016 | To Machinery A/c | 26,000 | 31.03.2016 | By Profit/Loss A/c | 26,000 | ||
| 26,000 | 26,000 | ||||||
| 30.09.2016 | To Machinery A/c | 10,000 | 30.09.2016 | By Profit/Loss A/c | 10,000 | ||
| 31.03.2017 | To Machinery A/c | 12,000 | 31.03.2017 | By Profit/Loss A/c | 12,000 | ||
| 22,000 | 22,000 | ||||||
Notes-
| Date | Particulars | 1st Machinery ₹ | 2nd Machinery ₹ |
| 1.4.2014 | Cost Price 1 | 2,00,000 | |
| 31.3.2015 | (-) Depreciation 10% | 20,000 | |
| 1,80,000 | |||
| 1.10.2015 | Cost price 2 | 1,20,000 | |
| 31.3.2016 | (-) Depreciation | 20,000 | 6,000 |
| 1,60,000 | 1,14,000 | ||
| 30.10.2016 | (-) Depreciation 1 | 10,000 | |
| Book Value | 1,50,000 | ||
| 30.10.2016 | (-) Sale price | 1,20,000 | |
| Loss | 30,000 | ||
| 31.3.2017 | (-) Depreciation 2 | 12,000 | |
| Balance in Machinery A/c | 1,02,000 |
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