a company whose accounting year is the calendar year , purchased on 1st april , 2008 , machinery costing 30000 . it purchased further machinery on 1st october , 2008 , costing 20,000 and on 1st july ,2009,costing 10,000 .
on 1st jan ,2010 , one-third of the machinery which was installed on 1st april , 2008 become obselete and was sold for 3,000 .
show how the machinery account would appear in the books of the company , it being given that machinery was depreciated by fixed instalment at 10 per p.a.(make full working ) .
Machinery Account | ||||||||
Dr. | Cr. | |||||||
Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |||
2008 |
|
| 2008 |
|
| |||
Apr. 01 | Bank A/c (M1) | 30,000 | Dec. 31 | Depreciation A/c |
| |||
Oct.01 | Bank A/c (M2) | 20,000 |
| M1(for 9 months) | 2,250 |
| ||
|
|
|
| M2(for 3 months) | 500 | 2,750 | ||
|
|
| Dec. 31 | Balance c/d |
| |||
|
|
|
| M1 | 27,750 |
| ||
|
|
|
| M2 | 19,500 | 47,250 | ||
|
| 50,000 |
|
| 50,000 | |||
2009 |
|
| 2009 |
|
| |||
Jan. 01 | Balance b/d |
| Dec. 31 | Depreciation A/c |
| |||
| M1 | 27,750 |
|
| M1 | 3,000 |
| |
| M2 | 19,500 | 47,250 |
| M2 | 2,000 |
| |
|
|
|
| M3 (for 6 months) | 500 | 5,500 | ||
July .01 | Bank (M3) | 10,000 | Dec. 31 | Balance c/d |
| |||
|
|
|
| M1 | 24,750* |
| ||
|
|
|
| M2 | 17,500 |
| ||
|
|
|
| M3 | 9,500 | 51,750 | ||
|
| 57,250 |
|
| 57,250 | |||
2010 |
|
| 2010 |
|
| |||
Jan. 01 | Balance b/d |
| Dec. 31 | Bank A/c (Sale of 1/3rd M1) | 3,000 | |||
| M1 | 24,750* |
|
| Profit and Loss A/c (Loss on Sale) | 5,250 | ||
| M2 | 17,500 |
|
|
|
| ||
| M3 | 9,500 | 51,750 |
| Depreciation on- |
| ||
|
|
|
| M1(2/3rd )** | 2,000 |
| ||
|
|
|
| M2 | 2,000 |
| ||
|
|
|
| M3 | 1,000 | 5,000 | ||
|
|
| Dec. 31 | Balance c/d |
| |||
|
|
|
| M1 | 14,500 |
| ||
|
|
|
| M2 | 15,500 |
| ||
|
|
|
| M3 | 8,500 | 38,500 | ||
|
| 51,750 |
|
| 51,750 | |||
|
|
|
|
|
| |||
Working Notes:
Book Value of machine sold: 30,000 X 1/3 = 10,000
Written down value of M1 on 01/01/10 : 24,750* x 1/3= 8,250
Sale Price of 1/3 M1 = 3,000
Loss on sale of 1/3rd part of M1 is 8,250 – 3,000= 5,250
Balance of M1 on 01/01/10- 24,750 x 2/3= 16,500 ( with Book Value of Rs 20,000)
**Depreciation on remaining M1 is 10% of 20,000= 2,000