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what will be the journal entry for - Provide depreciation on furniture rs 500 and machinery rs 2000?
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?what will be the journal entry for - Provide depreciation on furnitur...
Depreciation a/c Dr. 2500
To furniture a/c. 500
To machinery a/c. 2000
To furniture a/c. 500
To machinery a/c. 2000
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?what will be the journal entry for - Provide depreciation on furnitur...
Journal Entry for Depreciation on Furniture and Machinery
When a company purchases fixed assets like furniture and machinery, they are expected to lose value over time due to wear and tear and obsolescence. Depreciation is the process of allocating the cost of these assets over their useful lives. Here is the journal entry for providing depreciation on furniture and machinery:
Step 1: Identify the Account Types
- Depreciation Expense
- Accumulated Depreciation - Furniture
- Accumulated Depreciation - Machinery
Step 2: Determine the Amount of Depreciation
- The amount of depreciation depends on several factors like the original cost of the asset, its useful life, and the method of depreciation used.
- In this case, assume we are using the straight-line method, which spreads the cost of the asset evenly over its useful life.
- If the original cost of the furniture was Rs 10,000 and its useful life is 10 years, the annual depreciation would be Rs 1,000 (Rs 10,000 / 10 years).
- If the original cost of the machinery was Rs 40,000 and its useful life is 20 years, the annual depreciation would be Rs 2,000 (Rs 40,000 / 20 years).
Step 3: Record the Journal Entry
- Debit Depreciation Expense for Rs 2,500 (Rs 500 for furniture + Rs 2,000 for machinery)
- Credit Accumulated Depreciation - Furniture for Rs 500
- Credit Accumulated Depreciation - Machinery for Rs 2,000
The journal entry for providing depreciation on furniture and machinery shows a decrease in the value of the assets and an increase in the expense of the company. Depreciation is not a cash expense but is important for accurately reflecting the true value of the company's assets on its balance sheet.
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?what will be the journal entry for - Provide depreciation on furniture rs 500 and machinery rs 2000?
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?what will be the journal entry for - Provide depreciation on furniture rs 500 and machinery rs 2000? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about ?what will be the journal entry for - Provide depreciation on furniture rs 500 and machinery rs 2000? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for ?what will be the journal entry for - Provide depreciation on furniture rs 500 and machinery rs 2000?.
?what will be the journal entry for - Provide depreciation on furniture rs 500 and machinery rs 2000? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about ?what will be the journal entry for - Provide depreciation on furniture rs 500 and machinery rs 2000? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for ?what will be the journal entry for - Provide depreciation on furniture rs 500 and machinery rs 2000?.
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