? Agarwal Co. acquired a machine on 1st July 2013 at the cost of 14000...
Machinery Account and Depreciation Account for the years 2015 and 2016
Machinery Account:
The Machinery Account is a ledger account that records the transactions related to the acquisition, installation, and depreciation of machinery. It helps in tracking the cost and value of the machinery over time.
Year 2015:
On 1st July 2013, Agarwal Co. acquired a machine at a cost of $14,000 and spent an additional $1,000 on its installation. The depreciation rate is 10% of the original cost, and the books are closed on 31st December every year.
To calculate the machinery account for the year 2015, we need to consider the following transactions:
1. Opening Balance (as of 1st January 2015):
- Machinery: $14,000
2. Depreciation for the year:
- Depreciation = 10% of the original cost = 10% * $14,000 = $1,400
3. Closing Balance (as of 31st December 2015):
- Closing Balance = Opening Balance - Depreciation = $14,000 - $1,400 = $12,600
The machinery account for the year 2015 will be as follows:
Machinery Account
----------------------------------------------------
Date | Particulars | Amount
----------------------------------------------------
01/01/2015 | Opening Balance | $14,000
31/12/2015 | Depreciation | $1,400
31/12/2015 | Closing Balance | $12,600
Year 2016:
To calculate the machinery account for the year 2016, we need to consider the following transactions:
1. Opening Balance (as of 1st January 2016):
- Opening Balance = Closing Balance of the previous year = $12,600
2. Depreciation for the year:
- Depreciation = 10% of the original cost = 10% * $14,000 = $1,400
3. Closing Balance (as of 31st December 2016):
- Closing Balance = Opening Balance - Depreciation = $12,600 - $1,400 = $11,200
The machinery account for the year 2016 will be as follows:
Machinery Account
----------------------------------------------------
Date | Particulars | Amount
----------------------------------------------------
01/01/2016 | Opening Balance | $12,600
31/12/2016 | Depreciation | $1,400
31/12/2016 | Closing Balance | $11,200
Depreciation Account:
The Depreciation Account is a ledger account that records the annual depreciation expense for an asset. It helps in tracking the reduction in the value of the asset over time.
Year 2015:
To calculate the depreciation account for the year 2015, we need to consider the following transactions:
1. Depreciation Expense:
- Depreciation Expense = 10% of the original cost = 10% * $14,000 = $1,400
The depreciation account for the year 2015 will be as follows:
? Agarwal Co. acquired a machine on 1st July 2013 at the cost of 14000...
Agr yh ques. class 11 k h toh boht eazzy h....entry kr lo purchased goods k...then cr. side dep. & bal. entry...isko 1yr ya 2 ys show krna jo k ques. m likkha h
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.