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On April 01, 2004 the debit balance of the machinery account of A Ltd. was Rs.5,67,000.
The machine was purchased on April 01, 2002. The company charged depreciation at the rate of 10% per annum under diminishing balance method. On October 01, 2004, the company acquired a new machine at a cost of Rs.60,000 and incurred Rs.6,000 for installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the straight-line method with retrospective effect from April 01, 2002. The rate of depreciation will remain the same.
The company decided to make necessary adjustments in respect of depreciation due to the change in the method in the year 2004-2005.
The machine was purchased on April 01, 2002. The company charged depreciation at the rate of 10% per annum under diminishing balance method. On October 01, 2004, the company acquired a new machine at a cost of Rs.60,000 and incurred Rs.6,000 for installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the straight-line method with retrospective effect from April 01, 2002. The rate of depreciation will remain the same.
The company decided to make necessary adjustments in respect of depreciation due to the change in the method in the year 2004-2005.
Cost of machinery on 01.04.2002 = ________.
- a)Rs. 5,67,000
- b)Rs. 6,30,000
- c)Rs. 7,00,000
- d)Rs. 7,77,778
Correct answer is option 'C'. Can you explain this answer?
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Verified Answer
On April 01, 2004 the debit balance of the machinery account of A Ltd....
Let machinery on 1.04.2002 be x.
so 1st year depreciation will be x × 10/100 = x/10.
2nd year depreciation will be (x - x/10) × 10/100 = 9x/100.
so total depreciation will be x/10 + 9x/100 = 19x/100.
Therefore value of machinery on 01.04.2002 will be
x - 19x/100 = 567000
ie. 81x/100 = 567000
x = 567000 × 100 ÷ 81
= 700000
so 1st year depreciation will be x × 10/100 = x/10.
2nd year depreciation will be (x - x/10) × 10/100 = 9x/100.
so total depreciation will be x/10 + 9x/100 = 19x/100.
Therefore value of machinery on 01.04.2002 will be
x - 19x/100 = 567000
ie. 81x/100 = 567000
x = 567000 × 100 ÷ 81
= 700000
Most Upvoted Answer
On April 01, 2004 the debit balance of the machinery account of A Ltd....
Cost of Machinery on April 01, 2002:
As per the given information, the debit balance of the machinery account of A Ltd. was Rs.5,67,000 on April 01, 2004. The machine was purchased on April 01, 2002, and the company charged depreciation at the rate of 10% per annum under diminishing balance method.
We can calculate the original cost of machinery as follows:
Let the original cost of machinery be x.
Depreciation charged for 2 years at 10% per annum under diminishing balance method = x(1-0.1)^2 = 0.81x
So, the written down value (WDV) of machinery on April 01, 2004, can be calculated as:
WDV on April 01, 2004 = x - 0.81x = 0.19x = Rs.5,67,000
Therefore, x = Rs.5,67,000/0.19 = Rs.30,00,000
Hence, the Cost of machinery on April 01, 2002, was Rs.30,00,000.
Adjustments due to change in depreciation method:
The company changed the method of providing depreciation from the diminishing balance method to the straight-line method with retrospective effect from April 01, 2002. The rate of depreciation remained the same.
To make necessary adjustments in respect of depreciation due to the change in the method in the year 2004-2005, we need to calculate the depreciation charged under both methods for the period from April 01, 2002, to October 01, 2004:
Depreciation charged under diminishing balance method for 2.5 years = Rs.30,00,000*(1-0.1)^2.5 = Rs.17,51,881
Depreciation charged under straight-line method for 2.5 years = (Rs.30,00,000/Rs.10,00,000)*10%*2.5 = Rs.7,50,000
Therefore, the adjustment required in the year 2004-2005 = Rs.17,51,881 - Rs.7,50,000 = Rs.10,01,881
In addition, the company acquired a new machine at a cost of Rs.60,000 and incurred Rs.6,000 for installation of the new machine on October 01, 2004. The depreciation on the new machine will be charged under the straight-line method at the rate of 10% per annum. The total depreciation charged on the new machine for the year 2004-2005 will be:
Depreciation on new machine = (Rs.60,000 + Rs.6,000)/10 = Rs.6,600
Hence, the total adjustment required in the year 2004-2005 = Rs.10,01,881 + Rs.6,600 = Rs.10,08,481
Therefore, the necessary adjustments in respect of depreciation due to the change in the method in the year 2004-2005 are Rs.10,08,481.
As per the given information, the debit balance of the machinery account of A Ltd. was Rs.5,67,000 on April 01, 2004. The machine was purchased on April 01, 2002, and the company charged depreciation at the rate of 10% per annum under diminishing balance method.
We can calculate the original cost of machinery as follows:
Let the original cost of machinery be x.
Depreciation charged for 2 years at 10% per annum under diminishing balance method = x(1-0.1)^2 = 0.81x
So, the written down value (WDV) of machinery on April 01, 2004, can be calculated as:
WDV on April 01, 2004 = x - 0.81x = 0.19x = Rs.5,67,000
Therefore, x = Rs.5,67,000/0.19 = Rs.30,00,000
Hence, the Cost of machinery on April 01, 2002, was Rs.30,00,000.
Adjustments due to change in depreciation method:
The company changed the method of providing depreciation from the diminishing balance method to the straight-line method with retrospective effect from April 01, 2002. The rate of depreciation remained the same.
To make necessary adjustments in respect of depreciation due to the change in the method in the year 2004-2005, we need to calculate the depreciation charged under both methods for the period from April 01, 2002, to October 01, 2004:
Depreciation charged under diminishing balance method for 2.5 years = Rs.30,00,000*(1-0.1)^2.5 = Rs.17,51,881
Depreciation charged under straight-line method for 2.5 years = (Rs.30,00,000/Rs.10,00,000)*10%*2.5 = Rs.7,50,000
Therefore, the adjustment required in the year 2004-2005 = Rs.17,51,881 - Rs.7,50,000 = Rs.10,01,881
In addition, the company acquired a new machine at a cost of Rs.60,000 and incurred Rs.6,000 for installation of the new machine on October 01, 2004. The depreciation on the new machine will be charged under the straight-line method at the rate of 10% per annum. The total depreciation charged on the new machine for the year 2004-2005 will be:
Depreciation on new machine = (Rs.60,000 + Rs.6,000)/10 = Rs.6,600
Hence, the total adjustment required in the year 2004-2005 = Rs.10,01,881 + Rs.6,600 = Rs.10,08,481
Therefore, the necessary adjustments in respect of depreciation due to the change in the method in the year 2004-2005 are Rs.10,08,481.
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Community Answer
On April 01, 2004 the debit balance of the machinery account of A Ltd....
Let machinery on 1.04.2002 be x.
so 1st year depreciation will be x×10/100=x/10.
2nd year depreciation will be (x-x/10)×10/100 = 9x/100.
so total depreciation will be x/10 + 9x/100= 19x/100.
Therefore value of machinery on 01.04.2002 will be
x- 19x/100 =567000
ie. 81x/100 =567000
x =567000×100÷81
=700000
Therefore option c.
so 1st year depreciation will be x×10/100=x/10.
2nd year depreciation will be (x-x/10)×10/100 = 9x/100.
so total depreciation will be x/10 + 9x/100= 19x/100.
Therefore value of machinery on 01.04.2002 will be
x- 19x/100 =567000
ie. 81x/100 =567000
x =567000×100÷81
=700000
Therefore option c.
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On April 01, 2004 the debit balance of the machinery account of A Ltd. was Rs.5,67,000.The machine was purchased on April 01, 2002. The company charged depreciation at the rate of 10% per annum under diminishing balance method. On October 01, 2004, the company acquired a new machine at a cost of Rs.60,000 and incurred Rs.6,000 for installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the straight-line method with retrospective effect from April 01, 2002. The rate of depreciation will remain the same.The company decided to make necessary adjustments in respect of depreciation due to the change in the method in the year 2004-2005.Cost of machinery on 01.04.2002 = ________.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'C'. Can you explain this answer?
Question Description
On April 01, 2004 the debit balance of the machinery account of A Ltd. was Rs.5,67,000.The machine was purchased on April 01, 2002. The company charged depreciation at the rate of 10% per annum under diminishing balance method. On October 01, 2004, the company acquired a new machine at a cost of Rs.60,000 and incurred Rs.6,000 for installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the straight-line method with retrospective effect from April 01, 2002. The rate of depreciation will remain the same.The company decided to make necessary adjustments in respect of depreciation due to the change in the method in the year 2004-2005.Cost of machinery on 01.04.2002 = ________.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about On April 01, 2004 the debit balance of the machinery account of A Ltd. was Rs.5,67,000.The machine was purchased on April 01, 2002. The company charged depreciation at the rate of 10% per annum under diminishing balance method. On October 01, 2004, the company acquired a new machine at a cost of Rs.60,000 and incurred Rs.6,000 for installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the straight-line method with retrospective effect from April 01, 2002. The rate of depreciation will remain the same.The company decided to make necessary adjustments in respect of depreciation due to the change in the method in the year 2004-2005.Cost of machinery on 01.04.2002 = ________.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On April 01, 2004 the debit balance of the machinery account of A Ltd. was Rs.5,67,000.The machine was purchased on April 01, 2002. The company charged depreciation at the rate of 10% per annum under diminishing balance method. On October 01, 2004, the company acquired a new machine at a cost of Rs.60,000 and incurred Rs.6,000 for installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the straight-line method with retrospective effect from April 01, 2002. The rate of depreciation will remain the same.The company decided to make necessary adjustments in respect of depreciation due to the change in the method in the year 2004-2005.Cost of machinery on 01.04.2002 = ________.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'C'. Can you explain this answer?.
On April 01, 2004 the debit balance of the machinery account of A Ltd. was Rs.5,67,000.The machine was purchased on April 01, 2002. The company charged depreciation at the rate of 10% per annum under diminishing balance method. On October 01, 2004, the company acquired a new machine at a cost of Rs.60,000 and incurred Rs.6,000 for installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the straight-line method with retrospective effect from April 01, 2002. The rate of depreciation will remain the same.The company decided to make necessary adjustments in respect of depreciation due to the change in the method in the year 2004-2005.Cost of machinery on 01.04.2002 = ________.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about On April 01, 2004 the debit balance of the machinery account of A Ltd. was Rs.5,67,000.The machine was purchased on April 01, 2002. The company charged depreciation at the rate of 10% per annum under diminishing balance method. On October 01, 2004, the company acquired a new machine at a cost of Rs.60,000 and incurred Rs.6,000 for installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the straight-line method with retrospective effect from April 01, 2002. The rate of depreciation will remain the same.The company decided to make necessary adjustments in respect of depreciation due to the change in the method in the year 2004-2005.Cost of machinery on 01.04.2002 = ________.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On April 01, 2004 the debit balance of the machinery account of A Ltd. was Rs.5,67,000.The machine was purchased on April 01, 2002. The company charged depreciation at the rate of 10% per annum under diminishing balance method. On October 01, 2004, the company acquired a new machine at a cost of Rs.60,000 and incurred Rs.6,000 for installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the straight-line method with retrospective effect from April 01, 2002. The rate of depreciation will remain the same.The company decided to make necessary adjustments in respect of depreciation due to the change in the method in the year 2004-2005.Cost of machinery on 01.04.2002 = ________.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'C'. Can you explain this answer?.
Solutions for On April 01, 2004 the debit balance of the machinery account of A Ltd. was Rs.5,67,000.The machine was purchased on April 01, 2002. The company charged depreciation at the rate of 10% per annum under diminishing balance method. On October 01, 2004, the company acquired a new machine at a cost of Rs.60,000 and incurred Rs.6,000 for installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the straight-line method with retrospective effect from April 01, 2002. The rate of depreciation will remain the same.The company decided to make necessary adjustments in respect of depreciation due to the change in the method in the year 2004-2005.Cost of machinery on 01.04.2002 = ________.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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On April 01, 2004 the debit balance of the machinery account of A Ltd. was Rs.5,67,000.The machine was purchased on April 01, 2002. The company charged depreciation at the rate of 10% per annum under diminishing balance method. On October 01, 2004, the company acquired a new machine at a cost of Rs.60,000 and incurred Rs.6,000 for installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the straight-line method with retrospective effect from April 01, 2002. The rate of depreciation will remain the same.The company decided to make necessary adjustments in respect of depreciation due to the change in the method in the year 2004-2005.Cost of machinery on 01.04.2002 = ________.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'C'. Can you explain this answer?, a detailed solution for On April 01, 2004 the debit balance of the machinery account of A Ltd. was Rs.5,67,000.The machine was purchased on April 01, 2002. The company charged depreciation at the rate of 10% per annum under diminishing balance method. On October 01, 2004, the company acquired a new machine at a cost of Rs.60,000 and incurred Rs.6,000 for installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the straight-line method with retrospective effect from April 01, 2002. The rate of depreciation will remain the same.The company decided to make necessary adjustments in respect of depreciation due to the change in the method in the year 2004-2005.Cost of machinery on 01.04.2002 = ________.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of On April 01, 2004 the debit balance of the machinery account of A Ltd. was Rs.5,67,000.The machine was purchased on April 01, 2002. The company charged depreciation at the rate of 10% per annum under diminishing balance method. On October 01, 2004, the company acquired a new machine at a cost of Rs.60,000 and incurred Rs.6,000 for installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the straight-line method with retrospective effect from April 01, 2002. The rate of depreciation will remain the same.The company decided to make necessary adjustments in respect of depreciation due to the change in the method in the year 2004-2005.Cost of machinery on 01.04.2002 = ________.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice On April 01, 2004 the debit balance of the machinery account of A Ltd. was Rs.5,67,000.The machine was purchased on April 01, 2002. The company charged depreciation at the rate of 10% per annum under diminishing balance method. On October 01, 2004, the company acquired a new machine at a cost of Rs.60,000 and incurred Rs.6,000 for installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the straight-line method with retrospective effect from April 01, 2002. The rate of depreciation will remain the same.The company decided to make necessary adjustments in respect of depreciation due to the change in the method in the year 2004-2005.Cost of machinery on 01.04.2002 = ________.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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