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On 1.1.18 the balance of machinery account was rs 48600 in 1.7.18 a new machine was purchase for 24000 the installatiom cost come 1000 on 1.9.18 an old machine was sold for 6000 the orginal cost of which 10000 on 1.1 16 machinery id depriciated at 10% p.a under the balnce method show machinery account 2018 the book closed 31 dec every day?
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On 1.1.18 the balance of machinery account was rs 48600 in 1.7.18 a ne...
Calculation of Machinery Account for 2018

Opening Balance as on 1.1.18: Rs. 48,600

Purchase of new machine on 1.7.18: Rs. 24,000

Installation cost of new machine: Rs. 1,000

Sale of old machine on 1.9.18: Rs. 6,000

Original cost of old machine: Rs. 10,000

Depreciation Rate: 10% p.a

Method of Depreciation: Balance Method

Depreciation for the year:

- Old Machine: Rs. 1,000 (10% of Rs. 10,000)
- Opening Balance: Rs. 4,860 (Rs. 48,600 - Rs. 1,000)
- New Machine: Rs. 240 (10% of Rs. 2,400 - Rs. 240)
- Total Depreciation: Rs. 1,240
- Closing Balance: Rs. 70,600 (Rs. 48,600 + Rs. 24,000 + Rs. 1,000 - Rs. 6,000 - Rs. 1,240)

Journal Entries:

- On 1.7.18: Machinery A/c Dr. Rs. 24,000
- To Bank A/c Rs. 24,000 (Purchase of new machine)
- On 1.7.18: Machinery A/c Dr. Rs. 1,000
- To Bank A/c Rs. 1,000 (Installation cost of new machine)
- On 1.9.18: Bank A/c Dr. Rs. 6,000
- To Machinery A/c Rs. 6,000 (Sale of old machine)
- On 31.12.18: Depreciation A/c Dr. Rs. 1,240
- To Machinery A/c Rs. 1,240 (Depreciation for the year)

Explanation:

- Machinery account is a nominal account which is debited for the cost of new machinery purchased, installation cost of new machinery and depreciation charged during the year.
- It is credited for the sale of old machinery during the year.
- In this case, the opening balance of machinery account was Rs. 48,600 and a new machine was purchased for Rs. 24,000 with an installation cost of Rs. 1,000.
- An old machine was sold for Rs. 6,000 with an original cost of Rs. 10,000.
- Depreciation is charged at the rate of 10% p.a under the balance method.
- Depreciation for the year is calculated and charged to the machinery account.
- The closing balance of machinery account is calculated as Rs. 70,600.
- The journal entries for purchase, installation, sale and depreciation are passed in the books of accounts.
- The machinery account is closed at the end of the year by transferring the balance to the balance sheet.
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On 1.1.18 the balance of machinery account was rs 48600 in 1.7.18 a new machine was purchase for 24000 the installatiom cost come 1000 on 1.9.18 an old machine was sold for 6000 the orginal cost of which 10000 on 1.1 16 machinery id depriciated at 10% p.a under the balnce method show machinery account 2018 the book closed 31 dec every day?
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On 1.1.18 the balance of machinery account was rs 48600 in 1.7.18 a new machine was purchase for 24000 the installatiom cost come 1000 on 1.9.18 an old machine was sold for 6000 the orginal cost of which 10000 on 1.1 16 machinery id depriciated at 10% p.a under the balnce method show machinery account 2018 the book closed 31 dec every day? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about On 1.1.18 the balance of machinery account was rs 48600 in 1.7.18 a new machine was purchase for 24000 the installatiom cost come 1000 on 1.9.18 an old machine was sold for 6000 the orginal cost of which 10000 on 1.1 16 machinery id depriciated at 10% p.a under the balnce method show machinery account 2018 the book closed 31 dec every day? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1.1.18 the balance of machinery account was rs 48600 in 1.7.18 a new machine was purchase for 24000 the installatiom cost come 1000 on 1.9.18 an old machine was sold for 6000 the orginal cost of which 10000 on 1.1 16 machinery id depriciated at 10% p.a under the balnce method show machinery account 2018 the book closed 31 dec every day?.
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