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A company purchased a machinery for 170000 on 1 july 2015 on the same day it spent 30000 for its installation on 1 october 2015 another machinery is purchased of 225000 on 1 october 2017 the first machinery which was purchased on 1 july 2015 was sold of 110000 another machinery is purchased for 200000 on the same day prepare machinery a/C till 31 march 2018 if depreciation is provided @ 10% p.a. by diminishing value method?
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A company purchased a machinery for 170000 on 1 july 2015 on the same ...
Preparation of Machinery Account till 31st March 2018
Introduction
In this question, we are required to prepare the machinery account till 31st March 2018. We are also given the details of the machinery purchased, sold, and installed during the accounting period. Depreciation is provided at the rate of 10% p.a. by the diminishing value method.
Details of Machinery Purchased and Sold
- Machinery purchased on 1st July 2015 for Rs. 170000
- Installation expenses incurred on 1st July 2015 for Rs. 30000
- Machinery purchased on 1st October 2017 for Rs. 225000
- Machinery sold on 1st October 2017 for Rs. 110000
- Machinery purchased on the same day for Rs. 200000
Calculation of Depreciation
Depreciation is the measure of the wear and tear of the machinery. It is calculated by applying the rate of depreciation on the original cost of the machinery. In this question, depreciation is provided at the rate of 10% p.a. by the diminishing value method.
The formula for calculating depreciation by the diminishing value method is:
Depreciation = Opening Balance x Rate of Depreciation
Opening Balance = Original Cost - Depreciation Charged in the Previous Year
Year 1 (1st July 2015 - 31st March 2016)
Opening Balance = Rs. 200000
Depreciation = Rs. 200000 x 10% = Rs. 20000
Closing Balance = Rs. 180000
Year 2 (1st April 2016 - 31st March 2017)
Opening Balance = Rs. 180000
Depreciation = Rs. 180000 x 10% = Rs. 18000
Closing Balance = Rs. 162000
Year 3 (1st April 2017 - 30th September 2017)
Opening Balance = Rs. 162000
Depreciation = Rs. 162000 x 10% = Rs. 16200
Closing Balance = Rs. 145800
Preparation of Machinery Account
Machinery Account
Particulars| Amount (Rs.)| Particulars| Amount (Rs.)
---|---|---|---
Opening Balance| -| Machinery Purchased (1st July 2015)| 200000
Installation Expenses| 30000| Depreciation for Year 1| 20000
Total| 230000| Closing Balance| 180000
Machinery Purchased (1st October 2017)| 225000| Depreciation for Year 2| 18000
Machinery Sold (1st October 2017)| -110000| Closing Balance| 295000
Total| 345000| Machinery Purchased (1st October 2017)| 200000
Depreciation for Year 1| 20000| Depreciation for Year 3| 16200
Depreciation for Year 2| 18000| Closing Balance| 478400
Depreciation for Year 3| 16200|
Total Depreciation| 74200|
Closing Balance| 478400|
Conclusion
Introduction
In this question, we are required to prepare the machinery account till 31st March 2018. We are also given the details of the machinery purchased, sold, and installed during the accounting period. Depreciation is provided at the rate of 10% p.a. by the diminishing value method.
Details of Machinery Purchased and Sold
- Machinery purchased on 1st July 2015 for Rs. 170000
- Installation expenses incurred on 1st July 2015 for Rs. 30000
- Machinery purchased on 1st October 2017 for Rs. 225000
- Machinery sold on 1st October 2017 for Rs. 110000
- Machinery purchased on the same day for Rs. 200000
Calculation of Depreciation
Depreciation is the measure of the wear and tear of the machinery. It is calculated by applying the rate of depreciation on the original cost of the machinery. In this question, depreciation is provided at the rate of 10% p.a. by the diminishing value method.
The formula for calculating depreciation by the diminishing value method is:
Depreciation = Opening Balance x Rate of Depreciation
Opening Balance = Original Cost - Depreciation Charged in the Previous Year
Year 1 (1st July 2015 - 31st March 2016)
Opening Balance = Rs. 200000
Depreciation = Rs. 200000 x 10% = Rs. 20000
Closing Balance = Rs. 180000
Year 2 (1st April 2016 - 31st March 2017)
Opening Balance = Rs. 180000
Depreciation = Rs. 180000 x 10% = Rs. 18000
Closing Balance = Rs. 162000
Year 3 (1st April 2017 - 30th September 2017)
Opening Balance = Rs. 162000
Depreciation = Rs. 162000 x 10% = Rs. 16200
Closing Balance = Rs. 145800
Preparation of Machinery Account
Machinery Account
Particulars| Amount (Rs.)| Particulars| Amount (Rs.)
---|---|---|---
Opening Balance| -| Machinery Purchased (1st July 2015)| 200000
Installation Expenses| 30000| Depreciation for Year 1| 20000
Total| 230000| Closing Balance| 180000
Machinery Purchased (1st October 2017)| 225000| Depreciation for Year 2| 18000
Machinery Sold (1st October 2017)| -110000| Closing Balance| 295000
Total| 345000| Machinery Purchased (1st October 2017)| 200000
Depreciation for Year 1| 20000| Depreciation for Year 3| 16200
Depreciation for Year 2| 18000| Closing Balance| 478400
Depreciation for Year 3| 16200|
Total Depreciation| 74200|
Closing Balance| 478400|
Conclusion
Community Answer
A company purchased a machinery for 170000 on 1 july 2015 on the same ...
Loss sale of machinery 48175
machinery ac on 31 March 363137.5
machinery ac on 31 March 363137.5
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A company purchased a machinery for 170000 on 1 july 2015 on the same day it spent 30000 for its installation on 1 october 2015 another machinery is purchased of 225000 on 1 october 2017 the first machinery which was purchased on 1 july 2015 was sold of 110000 another machinery is purchased for 200000 on the same day prepare machinery a/C till 31 march 2018 if depreciation is provided @ 10% p.a. by diminishing value method?
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A company purchased a machinery for 170000 on 1 july 2015 on the same day it spent 30000 for its installation on 1 october 2015 another machinery is purchased of 225000 on 1 october 2017 the first machinery which was purchased on 1 july 2015 was sold of 110000 another machinery is purchased for 200000 on the same day prepare machinery a/C till 31 march 2018 if depreciation is provided @ 10% p.a. by diminishing value method? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A company purchased a machinery for 170000 on 1 july 2015 on the same day it spent 30000 for its installation on 1 october 2015 another machinery is purchased of 225000 on 1 october 2017 the first machinery which was purchased on 1 july 2015 was sold of 110000 another machinery is purchased for 200000 on the same day prepare machinery a/C till 31 march 2018 if depreciation is provided @ 10% p.a. by diminishing value method? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company purchased a machinery for 170000 on 1 july 2015 on the same day it spent 30000 for its installation on 1 october 2015 another machinery is purchased of 225000 on 1 october 2017 the first machinery which was purchased on 1 july 2015 was sold of 110000 another machinery is purchased for 200000 on the same day prepare machinery a/C till 31 march 2018 if depreciation is provided @ 10% p.a. by diminishing value method?.
A company purchased a machinery for 170000 on 1 july 2015 on the same day it spent 30000 for its installation on 1 october 2015 another machinery is purchased of 225000 on 1 october 2017 the first machinery which was purchased on 1 july 2015 was sold of 110000 another machinery is purchased for 200000 on the same day prepare machinery a/C till 31 march 2018 if depreciation is provided @ 10% p.a. by diminishing value method? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A company purchased a machinery for 170000 on 1 july 2015 on the same day it spent 30000 for its installation on 1 october 2015 another machinery is purchased of 225000 on 1 october 2017 the first machinery which was purchased on 1 july 2015 was sold of 110000 another machinery is purchased for 200000 on the same day prepare machinery a/C till 31 march 2018 if depreciation is provided @ 10% p.a. by diminishing value method? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company purchased a machinery for 170000 on 1 july 2015 on the same day it spent 30000 for its installation on 1 october 2015 another machinery is purchased of 225000 on 1 october 2017 the first machinery which was purchased on 1 july 2015 was sold of 110000 another machinery is purchased for 200000 on the same day prepare machinery a/C till 31 march 2018 if depreciation is provided @ 10% p.a. by diminishing value method?.
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