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Mohan purchase a machinery at ₹50,000 on 1st january, 2014. An other machinery purchased in 1st july same year ₹30,000. He charges depreciation by straight line method. You are required to prepare machinery account for three years charging depreciation @10% account are closed on 31st december every year.?
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Mohan purchase a machinery at ₹50,000 on 1st january, 2014. An other m...
Preparation of Machinery Account with Straight Line Method
Introduction: In this question, we need to prepare the machinery account for three years, starting from 1st January 2014, with a purchase of ₹50,000 and another machinery purchased on 1st July the same year for ₹30,000. The depreciation is to be charged @10% per annum, and the accounts are closed on 31st December every year.
Steps:
1. Calculate the annual depreciation amount by using the straight line method, which is (Cost of machinery - Scrap value) / Useful life. Here, we assume that the useful life of the machinery is 10 years, and the scrap value is zero.
Annual Depreciation = (Cost of machinery - Scrap value) / Useful life
= (₹50,000 - ₹0) / 10
= ₹5,000 per annum
2. Create a Machinery account and post the transactions for the year 2014.
Machinery Account
| Date | Particulars | Amount | Date | Particulars | Amount |
| --- | --- | --- | --- | --- | --- |
| 1-Jan-2014 | To Bank A/c | ₹50,000 | 31-Dec-2014 | By Depreciation A/c | ₹5,000 |
| 1-Jul-2014 | To Bank A/c | ₹30,000 | 31-Dec-2014 | By Depreciation A/c | ₹3,000 |
| 31-Dec-2014 | By Balance c/d | ₹72,000 | | | |
3. Calculate the closing balance of the Machinery account for the year 2014, which is the sum of the two purchases and the depreciation amount.
Closing Balance = ₹50,000 + ₹30,000 - ₹5,000 - ₹3,000
= ₹72,000
4. Post the transactions for the year 2015.
Machinery Account
| Date | Particulars | Amount | Date | Particulars | Amount |
| --- | --- | --- | --- | --- | --- |
| 31-Dec-2015 | By Depreciation A/c | ₹8,000 | 31-Dec-2015 | By Balance c/d | ₹64,000 |
| | | | | | |
5. Calculate the closing balance of the Machinery account for the year 2015, which is the opening balance minus the depreciation amount.
Closing Balance = ₹72,000 - ₹8,000
= ₹64,000
6. Post the transactions for the year 2016.
Machinery Account
| Date | Particulars | Amount | Date | Particulars | Amount |
| --- | --- | --- | --- | --- | --- |
| 31-Dec-2016 | By Depreciation A/c | ₹8,000 | 31-Dec-2016 | By Balance c/d | ₹56,000 |
| | | | | | |
7. Calculate the closing balance of the Machinery account for the year 2016, which is the opening balance minus the depreciation amount.
Closing Balance = ₹64,000 - ₹8,000
= ₹56,000
Conclusion: In this way, we can prepare the Machinery
Introduction: In this question, we need to prepare the machinery account for three years, starting from 1st January 2014, with a purchase of ₹50,000 and another machinery purchased on 1st July the same year for ₹30,000. The depreciation is to be charged @10% per annum, and the accounts are closed on 31st December every year.
Steps:
1. Calculate the annual depreciation amount by using the straight line method, which is (Cost of machinery - Scrap value) / Useful life. Here, we assume that the useful life of the machinery is 10 years, and the scrap value is zero.
Annual Depreciation = (Cost of machinery - Scrap value) / Useful life
= (₹50,000 - ₹0) / 10
= ₹5,000 per annum
2. Create a Machinery account and post the transactions for the year 2014.
Machinery Account
| Date | Particulars | Amount | Date | Particulars | Amount |
| --- | --- | --- | --- | --- | --- |
| 1-Jan-2014 | To Bank A/c | ₹50,000 | 31-Dec-2014 | By Depreciation A/c | ₹5,000 |
| 1-Jul-2014 | To Bank A/c | ₹30,000 | 31-Dec-2014 | By Depreciation A/c | ₹3,000 |
| 31-Dec-2014 | By Balance c/d | ₹72,000 | | | |
3. Calculate the closing balance of the Machinery account for the year 2014, which is the sum of the two purchases and the depreciation amount.
Closing Balance = ₹50,000 + ₹30,000 - ₹5,000 - ₹3,000
= ₹72,000
4. Post the transactions for the year 2015.
Machinery Account
| Date | Particulars | Amount | Date | Particulars | Amount |
| --- | --- | --- | --- | --- | --- |
| 31-Dec-2015 | By Depreciation A/c | ₹8,000 | 31-Dec-2015 | By Balance c/d | ₹64,000 |
| | | | | | |
5. Calculate the closing balance of the Machinery account for the year 2015, which is the opening balance minus the depreciation amount.
Closing Balance = ₹72,000 - ₹8,000
= ₹64,000
6. Post the transactions for the year 2016.
Machinery Account
| Date | Particulars | Amount | Date | Particulars | Amount |
| --- | --- | --- | --- | --- | --- |
| 31-Dec-2016 | By Depreciation A/c | ₹8,000 | 31-Dec-2016 | By Balance c/d | ₹56,000 |
| | | | | | |
7. Calculate the closing balance of the Machinery account for the year 2016, which is the opening balance minus the depreciation amount.
Closing Balance = ₹64,000 - ₹8,000
= ₹56,000
Conclusion: In this way, we can prepare the Machinery
Community Answer
Mohan purchase a machinery at ₹50,000 on 1st january, 2014. An other m...
Machine 1
purchased on 01 Jan
cost of Machine 50000
working Note:
- 1.01.16 (asset acq) 50,000
- 31.12.16 (depr.@10%). 5000
- 01.01.17. 45,000
- 31.12.17. (depr@10%) 5000
- 01.01.18. 40000
- 31.12.18. (depr@10%). 5000
- 01.01.19. 35000
Machine 2
purchased on 01 July
cost of Machine 30000
working Note:
1.07.16 (asset acq) 30,000
31.12.16 (depr.@10%*6/12). 1500
01.01.17. 28,500
31.12.17. (depr@10%) 3000
01.01.18. 25500
31.12.18. (depr@10%). 3000
01.01.19. 22500
I Hope this helps you
Pls try to Do the Machinery A/C
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Mohan purchase a machinery at ₹50,000 on 1st january, 2014. An other machinery purchased in 1st july same year ₹30,000. He charges depreciation by straight line method. You are required to prepare machinery account for three years charging depreciation @10% account are closed on 31st december every year.?
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Mohan purchase a machinery at ₹50,000 on 1st january, 2014. An other machinery purchased in 1st july same year ₹30,000. He charges depreciation by straight line method. You are required to prepare machinery account for three years charging depreciation @10% account are closed on 31st december every year.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Mohan purchase a machinery at ₹50,000 on 1st january, 2014. An other machinery purchased in 1st july same year ₹30,000. He charges depreciation by straight line method. You are required to prepare machinery account for three years charging depreciation @10% account are closed on 31st december every year.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Mohan purchase a machinery at ₹50,000 on 1st january, 2014. An other machinery purchased in 1st july same year ₹30,000. He charges depreciation by straight line method. You are required to prepare machinery account for three years charging depreciation @10% account are closed on 31st december every year.?.
Mohan purchase a machinery at ₹50,000 on 1st january, 2014. An other machinery purchased in 1st july same year ₹30,000. He charges depreciation by straight line method. You are required to prepare machinery account for three years charging depreciation @10% account are closed on 31st december every year.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Mohan purchase a machinery at ₹50,000 on 1st january, 2014. An other machinery purchased in 1st july same year ₹30,000. He charges depreciation by straight line method. You are required to prepare machinery account for three years charging depreciation @10% account are closed on 31st december every year.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Mohan purchase a machinery at ₹50,000 on 1st january, 2014. An other machinery purchased in 1st july same year ₹30,000. He charges depreciation by straight line method. You are required to prepare machinery account for three years charging depreciation @10% account are closed on 31st december every year.?.
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Mohan purchase a machinery at ₹50,000 on 1st january, 2014. An other machinery purchased in 1st july same year ₹30,000. He charges depreciation by straight line method. You are required to prepare machinery account for three years charging depreciation @10% account are closed on 31st december every year.?, a detailed solution for Mohan purchase a machinery at ₹50,000 on 1st january, 2014. An other machinery purchased in 1st july same year ₹30,000. He charges depreciation by straight line method. You are required to prepare machinery account for three years charging depreciation @10% account are closed on 31st december every year.? has been provided alongside types of Mohan purchase a machinery at ₹50,000 on 1st january, 2014. An other machinery purchased in 1st july same year ₹30,000. He charges depreciation by straight line method. You are required to prepare machinery account for three years charging depreciation @10% account are closed on 31st december every year.? theory, EduRev gives you an
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