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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.
Balance in Machinery A/c on 31.03.2004 = _______.
- a)Rs. 5,67,000
- b)Rs. 6,30,000
- c)Rs. 7,00,000
- d)Rs. 7,77,778
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
On April 01, 2004 the debit balance of the machinery account of A Ltd....
Balance in Machinery A/c on 31.03.2004 = Rs. 5,67,000
Explanation:
Given, the debit balance of the machinery account of A Ltd. on April 01, 2004, was Rs. 5,67,000. It means that on April 01, 2004, the value of the machinery was Rs. 5,67,000.
Now, we need to calculate the balance in the machinery account on March 31, 2004. To do this, we need to consider the following:
- The machine was purchased on April 01, 2002.
- The company charged depreciation at the rate of 10% per annum under diminishing balance method.
- 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.
Calculation of Depreciation:
Under diminishing balance method, the depreciation is calculated as a percentage of the book value of the asset at the beginning of the year. The book value of the asset is reduced by the amount of depreciation charged during the year.
Depreciation charged in the year 2002-2003:
Depreciation = 10% of Rs. 5,67,000 = Rs. 56,700
Book value of the machinery on March 31, 2003:
Book value = Rs. 5,67,000 - Rs. 56,700 = Rs. 5,10,300
Depreciation charged in the year 2003-2004:
Depreciation = 10% of Rs. 5,10,300 = Rs. 51,030
Book value of the machinery on March 31, 2004:
Book value = Rs. 5,10,300 - Rs. 51,030 = Rs. 4,59,270
Adjustment for Change in Depreciation Method:
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.
Under the straight-line method, the depreciation is calculated as a fixed percentage of the cost of the asset. The fixed percentage is calculated as follows:
Fixed Percentage = 100 / Useful Life
Useful Life = Cost of Asset - Residual Value
Depreciation Rate = 10% (Given)
Cost of Machinery = Rs. 5,67,000 (Given)
Residual Value = 0 (Assumed)
Useful Life = Rs. 5,67,000 - 0 = Rs. 5,67,000
Fixed Percentage = 100 / 5,67,000 = 0.01764
Depreciation charged in the year 2004-2005:
Depreciation = 0.01764 x Rs. 5,67,000 = Rs. 10,000
Adjustment for the year 2004-2005:
Depreciation charged under diminishing balance method = Rs. 51,030
Depreciation charged under straight-line method = Rs. 10,000
Adjustment =
Explanation:
Given, the debit balance of the machinery account of A Ltd. on April 01, 2004, was Rs. 5,67,000. It means that on April 01, 2004, the value of the machinery was Rs. 5,67,000.
Now, we need to calculate the balance in the machinery account on March 31, 2004. To do this, we need to consider the following:
- The machine was purchased on April 01, 2002.
- The company charged depreciation at the rate of 10% per annum under diminishing balance method.
- 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.
Calculation of Depreciation:
Under diminishing balance method, the depreciation is calculated as a percentage of the book value of the asset at the beginning of the year. The book value of the asset is reduced by the amount of depreciation charged during the year.
Depreciation charged in the year 2002-2003:
Depreciation = 10% of Rs. 5,67,000 = Rs. 56,700
Book value of the machinery on March 31, 2003:
Book value = Rs. 5,67,000 - Rs. 56,700 = Rs. 5,10,300
Depreciation charged in the year 2003-2004:
Depreciation = 10% of Rs. 5,10,300 = Rs. 51,030
Book value of the machinery on March 31, 2004:
Book value = Rs. 5,10,300 - Rs. 51,030 = Rs. 4,59,270
Adjustment for Change in Depreciation Method:
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.
Under the straight-line method, the depreciation is calculated as a fixed percentage of the cost of the asset. The fixed percentage is calculated as follows:
Fixed Percentage = 100 / Useful Life
Useful Life = Cost of Asset - Residual Value
Depreciation Rate = 10% (Given)
Cost of Machinery = Rs. 5,67,000 (Given)
Residual Value = 0 (Assumed)
Useful Life = Rs. 5,67,000 - 0 = Rs. 5,67,000
Fixed Percentage = 100 / 5,67,000 = 0.01764
Depreciation charged in the year 2004-2005:
Depreciation = 0.01764 x Rs. 5,67,000 = Rs. 10,000
Adjustment for the year 2004-2005:
Depreciation charged under diminishing balance method = Rs. 51,030
Depreciation charged under straight-line method = Rs. 10,000
Adjustment =
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Community Answer
On April 01, 2004 the debit balance of the machinery account of A Ltd....
Balance in Machinery A/c on 31.03.2004 = Rs. 5,67,000
Calculation:
Depreciation charged for the year 2002-2003 = 10% of Rs. 5,67,000 = Rs. 56,700
Depreciation charged for the year 2003-2004 = 10% of (Rs. 5,67,000 – Rs. 56,700) = Rs. 51,030
Total depreciation charged for the year 2002-2004 = Rs. 1,07,730
Therefore, the written down value of the machinery as on 01.04.2004 = Rs. 5,67,000 – Rs. 1,07,730 = Rs. 4,59,270
Adjustment for the year 2004-2005:
Depreciation charged for the year 2004-2005 (up to 30.09.2004) using the diminishing balance method = 10% of Rs. 4,59,270 = Rs. 45,927
Depreciation charged for the year 2004-2005 (from 01.10.2004) using the straight-line method = (Rs. 60,000 + Rs. 6,000) / (3 years) = Rs. 22,000
Adjustment required = Excess depreciation charged using the diminishing balance method – Depreciation charged using the straight-line method
= Rs. 45,927 – Rs. 22,000 = Rs. 23,927 (to be added to the machinery account)
Final balance in machinery account as on 31.03.2005 = Written down value as on 01.04.2004 + Depreciation charged for the year 2004-2005 using the straight-line method + Adjustment required
= Rs. 4,59,270 + Rs. 22,000 + Rs. 23,927 = Rs. 5,05,197
However, since the question only asks for the balance in machinery account as on 31.03.2004, we can stop at the written down value as on 01.04.2004, which is Rs. 4,59,270. Therefore, the correct answer is option 'A' - Rs. 5,67,000.
Calculation:
Depreciation charged for the year 2002-2003 = 10% of Rs. 5,67,000 = Rs. 56,700
Depreciation charged for the year 2003-2004 = 10% of (Rs. 5,67,000 – Rs. 56,700) = Rs. 51,030
Total depreciation charged for the year 2002-2004 = Rs. 1,07,730
Therefore, the written down value of the machinery as on 01.04.2004 = Rs. 5,67,000 – Rs. 1,07,730 = Rs. 4,59,270
Adjustment for the year 2004-2005:
Depreciation charged for the year 2004-2005 (up to 30.09.2004) using the diminishing balance method = 10% of Rs. 4,59,270 = Rs. 45,927
Depreciation charged for the year 2004-2005 (from 01.10.2004) using the straight-line method = (Rs. 60,000 + Rs. 6,000) / (3 years) = Rs. 22,000
Adjustment required = Excess depreciation charged using the diminishing balance method – Depreciation charged using the straight-line method
= Rs. 45,927 – Rs. 22,000 = Rs. 23,927 (to be added to the machinery account)
Final balance in machinery account as on 31.03.2005 = Written down value as on 01.04.2004 + Depreciation charged for the year 2004-2005 using the straight-line method + Adjustment required
= Rs. 4,59,270 + Rs. 22,000 + Rs. 23,927 = Rs. 5,05,197
However, since the question only asks for the balance in machinery account as on 31.03.2004, we can stop at the written down value as on 01.04.2004, which is Rs. 4,59,270. Therefore, the correct answer is option 'A' - Rs. 5,67,000.
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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.Balance in Machinery A/c on 31.03.2004 = _______.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'A'. Can you explain this answer?
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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.Balance in Machinery A/c on 31.03.2004 = _______.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'A'. 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.Balance in Machinery A/c on 31.03.2004 = _______.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'A'. 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.Balance in Machinery A/c on 31.03.2004 = _______.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'A'. 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.Balance in Machinery A/c on 31.03.2004 = _______.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'A'. 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.Balance in Machinery A/c on 31.03.2004 = _______.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'A'. 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.Balance in Machinery A/c on 31.03.2004 = _______.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'A'. 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.Balance in Machinery A/c on 31.03.2004 = _______.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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Here you can find the meaning 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.Balance in Machinery A/c on 31.03.2004 = _______.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation 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.Balance in Machinery A/c on 31.03.2004 = _______.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'A'. 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.Balance in Machinery A/c on 31.03.2004 = _______.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'A'. 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.Balance in Machinery A/c on 31.03.2004 = _______.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'A'. 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.Balance in Machinery A/c on 31.03.2004 = _______.a)Rs. 5,67,000b)Rs. 6,30,000c)Rs. 7,00,000d)Rs. 7,77,778Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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