B Com Exam  >  B Com Questions  >  1. XYZ Concern purchased machinery for Rs. 18... Start Learning for Free
1. XYZ Concern purchased machinery for Rs. 180000 on 1.1.17 and followed a straight line method of depreciating the machine charging depreciation 15% per annum. On 1.1.20 it was decided to follow the diminishing balance method charging depreciation at the rate of 10% P. a. from the date of purchase of the machinery and the necessary adjustment for change of method of depreciation to be made as on 31 12.20. Prepare the machinery 2020 account for the year 2020.?
Most Upvoted Answer
1. XYZ Concern purchased machinery for Rs. 180000 on 1.1.17 and follow...
Introduction:
In this question, we are given the details of XYZ Concern's machinery purchase and the change in depreciation method. We need to prepare the machinery account for the year 2020, considering the change in depreciation method and the necessary adjustment.

Machinery Account for the Year 2020:

Step 1: Calculating Depreciation for 2017-2019 using Straight Line Method:
- Machinery purchased on 1.1.17 for Rs. 180,000
- Straight line depreciation rate is 15% per annum

Depreciation for 2017:
Depreciation = 15% of Rs. 180,000 = Rs. 27,000

Depreciation for 2018:
Depreciation = 15% of Rs. 180,000 = Rs. 27,000

Depreciation for 2019:
Depreciation = 15% of Rs. 180,000 = Rs. 27,000

Step 2: Calculating Depreciation for 2020 using Diminishing Balance Method:
- Machinery purchased on 1.1.17 for Rs. 180,000
- Diminishing balance depreciation rate is 10% per annum

Depreciation for 2020:
Depreciation = 10% of (Rs. 180,000 - Rs. 81,000) = Rs. 9,900

Step 3: Preparing Machinery Account for the Year 2020:

Machinery Account for the Year 2020
------------------------------------------------
Date | Particulars | Amount (Rs.) |
------------------------------------------------
01.01.20 | To Balance b/d | 81,000 |
------------------------------------------------
31.12.20 | By Depreciation | 9,900 |
------------------------------------------------
31.12.20 | By Balance c/d | 71,100 |
------------------------------------------------
Explanation:
- The balance brought down (b/d) on 1.1.20 is Rs. 81,000, which is the net book value of the machinery after straight line depreciation till 31.12.19.
- Depreciation charged for the year 2020 using diminishing balance method is Rs. 9,900.
- The closing balance (c/d) on 31.12.20 is Rs. 71,100, which represents the net book value of the machinery after depreciation for the year 2020.

Conclusion:
In conclusion, the machinery account for the year 2020 shows the depreciation charged using the diminishing balance method and the net book value of the machinery at the end of the year. This account helps in keeping track of the depreciation expenses and the value of the machinery over time.
Explore Courses for B Com exam

Similar B Com Doubts

1. XYZ Concern purchased machinery for Rs. 180000 on 1.1.17 and followed a straight line method of depreciating the machine charging depreciation 15% per annum. On 1.1.20 it was decided to follow the diminishing balance method charging depreciation at the rate of 10% P. a. from the date of purchase of the machinery and the necessary adjustment for change of method of depreciation to be made as on 31 12.20. Prepare the machinery 2020 account for the year 2020.?
Question Description
1. XYZ Concern purchased machinery for Rs. 180000 on 1.1.17 and followed a straight line method of depreciating the machine charging depreciation 15% per annum. On 1.1.20 it was decided to follow the diminishing balance method charging depreciation at the rate of 10% P. a. from the date of purchase of the machinery and the necessary adjustment for change of method of depreciation to be made as on 31 12.20. Prepare the machinery 2020 account for the year 2020.? 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 1. XYZ Concern purchased machinery for Rs. 180000 on 1.1.17 and followed a straight line method of depreciating the machine charging depreciation 15% per annum. On 1.1.20 it was decided to follow the diminishing balance method charging depreciation at the rate of 10% P. a. from the date of purchase of the machinery and the necessary adjustment for change of method of depreciation to be made as on 31 12.20. Prepare the machinery 2020 account for the year 2020.? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 1. XYZ Concern purchased machinery for Rs. 180000 on 1.1.17 and followed a straight line method of depreciating the machine charging depreciation 15% per annum. On 1.1.20 it was decided to follow the diminishing balance method charging depreciation at the rate of 10% P. a. from the date of purchase of the machinery and the necessary adjustment for change of method of depreciation to be made as on 31 12.20. Prepare the machinery 2020 account for the year 2020.?.
Solutions for 1. XYZ Concern purchased machinery for Rs. 180000 on 1.1.17 and followed a straight line method of depreciating the machine charging depreciation 15% per annum. On 1.1.20 it was decided to follow the diminishing balance method charging depreciation at the rate of 10% P. a. from the date of purchase of the machinery and the necessary adjustment for change of method of depreciation to be made as on 31 12.20. Prepare the machinery 2020 account for the year 2020.? in English & in Hindi are available as part of our courses for B Com. Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free.
Here you can find the meaning of 1. XYZ Concern purchased machinery for Rs. 180000 on 1.1.17 and followed a straight line method of depreciating the machine charging depreciation 15% per annum. On 1.1.20 it was decided to follow the diminishing balance method charging depreciation at the rate of 10% P. a. from the date of purchase of the machinery and the necessary adjustment for change of method of depreciation to be made as on 31 12.20. Prepare the machinery 2020 account for the year 2020.? defined & explained in the simplest way possible. Besides giving the explanation of 1. XYZ Concern purchased machinery for Rs. 180000 on 1.1.17 and followed a straight line method of depreciating the machine charging depreciation 15% per annum. On 1.1.20 it was decided to follow the diminishing balance method charging depreciation at the rate of 10% P. a. from the date of purchase of the machinery and the necessary adjustment for change of method of depreciation to be made as on 31 12.20. Prepare the machinery 2020 account for the year 2020.?, a detailed solution for 1. XYZ Concern purchased machinery for Rs. 180000 on 1.1.17 and followed a straight line method of depreciating the machine charging depreciation 15% per annum. On 1.1.20 it was decided to follow the diminishing balance method charging depreciation at the rate of 10% P. a. from the date of purchase of the machinery and the necessary adjustment for change of method of depreciation to be made as on 31 12.20. Prepare the machinery 2020 account for the year 2020.? has been provided alongside types of 1. XYZ Concern purchased machinery for Rs. 180000 on 1.1.17 and followed a straight line method of depreciating the machine charging depreciation 15% per annum. On 1.1.20 it was decided to follow the diminishing balance method charging depreciation at the rate of 10% P. a. from the date of purchase of the machinery and the necessary adjustment for change of method of depreciation to be made as on 31 12.20. Prepare the machinery 2020 account for the year 2020.? theory, EduRev gives you an ample number of questions to practice 1. XYZ Concern purchased machinery for Rs. 180000 on 1.1.17 and followed a straight line method of depreciating the machine charging depreciation 15% per annum. On 1.1.20 it was decided to follow the diminishing balance method charging depreciation at the rate of 10% P. a. from the date of purchase of the machinery and the necessary adjustment for change of method of depreciation to be made as on 31 12.20. Prepare the machinery 2020 account for the year 2020.? tests, examples and also practice B Com tests.
Explore Courses for B Com exam
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev