Advertisements
Advertisements
Question
What adjusting entries would you record for the following:
Depreciation
Solution
| Dr. | Profit and Loss Account | Cr. | |
| Particulars | Amount | Particulars | Amount |
| Depreciation | |||
| Balance sheet | |||
| Liabilities | Amount | Assets | Amount |
| Assets | |||
| Less: Depreciation | |||
APPEARS IN
RELATED QUESTIONS
Why depreciation is charged ?
M/s. Ram Brothers, Pune purchased machinery worth Rs 1,25,000 on 1st April, 2006. On 1st October, 2006 they purchased additional machinery worth Rs 50,000.
On 1st October, 2008, the machinery purchased on 1st April, 2006 was sold by them at 20% below its written down value and on the same date, new machinery worth Rs 75,000 was purchased.
Depreciation was charged on 31st March every year @ 20% p.a. under diminishing balance method.
Prepare Machinery Account and Depreciation Account for the years 2006-07, 2007-08 and 2008-09.
M/s J. P. Company, Sakri, purchased a motor lorry for Rs. 8,00,000 on 1st April, 2007. Company purchased a second-hand motor lorry for Rs. 3,60,000 on 1st October, 2008. The company charges depreciation @ 10% p.a. on original cost. The financial year of the company ends on 31st March every year. On 30th September 2009, the second-hand motor lorry was sold for Rs. 2,80,000. Prepare: Motor Lorry's Account for the years 2007-2008, 2008-2009 and 2009-2010 and Journal Entries for the year 2009-2010.
Under Fixed Installment Method depreciation is charged on ______.
On 1st April, 1995 Avadhoot Traders, Ajara, purchased machinery for Rs. 40,000. On 1st October, 1995 they purchased further machinery costing Rs. 20,000. On 1st October, 1997 they sold machinery which was purchased on 1st April, 1995 for Rs. 28,780. Depreciation on machinery was provided at the rate of 10% p. a. on Diminishing Balance Method. The financial year closes on every 31st March. Prepare: Machinery A/c and Depreciation A/c for three years: 1995-96, 1996-97 and 1997-98.
Give the performa of income statement and balance in vertical form.
