5. On 1st April 2015 Suman Traders purchased machinery for ₹30,000. On 1st Oct 2015, they purchased further Machinery costing ₹20,000.
On 1st Oct 2016 they sold the Machine purchased on 1st April 2015 for ₹18,000 and brought another Machine for ₹15,000 on the same date.
Depreciation is provided on Machinery @20% p.a. on the Diminishing balance Method and financial year closing on 31st March every year.
Prepare the Machinery Account and Depreciation account for the year 2015-16, 2016-17 and 2017-18.
Solution:In the Books of Suman Traders
Machinery Account
Date | Particulars | JF | Amount | Date | Particulars | JF | Amount |
2015 |
|
|
| 2016 |
|
|
|
1st April | To cash/bank A/c |
| 30,000 | 31st March | By Depreciation A/c |
| 8,000 |
1st Oct | To cash/bank A/c |
| 20,000 |
|
|
|
|
|
|
|
| 31st March | By Balance c/d |
| 42,000 |
|
|
| 50,000 |
|
|
| 50,000 |
2016 |
|
|
| 2016 |
|
|
|
1st April | To Balane b/d |
| 42,000 | 1st Oct | By Depreciation A/c |
| 2,400 |
1st Oct | To Cash/Bank A/c |
| 15,000 | 1st Oct | By Cash/Bank A/c |
| 18,000 |
|
|
|
| 1st Oct | By Loss on Sale of Machinery |
| 3,600 |
|
|
|
| 2017 |
|
|
|
|
|
|
| 31st March | By Depreciation A/c |
| 5,100 |
|
|
|
| 31st March | By Balance c/d |
| 27,900 |
|
|
| 57,000 |
|
|
| 57,000 |
2017 |
|
|
| 2017 |
|
|
|
1st April | To Balance b/d |
| 27,900 | 31st March | By Depreciation A/c |
| 5,580 |
|
|
|
|
|
|
|
|
|
|
|
| 31st March | By Balance c/d |
| 22,320 |
|
|
| 27,900 |
|
|
| 27,900 |
|
|
|
|
|
|
|
|
2018 |
|
|
|
|
|
|
|
1st April | To Balance c/d |
| 22,320 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation Account
Date | Particulars | JF | Amount | Date | Particulars | JF | Amount |
2016 |
|
|
| 2016 |
|
|
|
31st March | To machinery A/c |
| 8,000 | 31st March | By Profit & Loss A/c |
| 10,400 |
1st Oct | To machinery A/c |
| 2,400 |
|
|
|
|
|
|
| 10,400 |
|
|
| 10,400 |
|
|
|
|
|
|
|
|
2017 |
|
|
| 2017 |
|
|
|
31st march | To machinery A/c |
| 5,100 | 31st March | By Profit & Loss A/c |
| 5,100 |
|
|
|
|
|
|
|
|
|
|
| 5,100 |
|
|
| 5,100 |
2018 |
|
|
| 2018 |
|
|
|
31st March | To machinery A/c |
| 5,580 | 31st march | By Profit & Loss A/c |
| 5,580 |
|
|
|
|
|
|
|
|
|
|
| 5,580 |
|
|
| 5,580 |
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