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Ms.Himal Traders purchased machinery on 1.1.2010 for Rs 200,000. Depreciation rate is 25% p.a. under straight line method.Sinking fund method is adopted for recording of depreciation. Return on sinking fund investment is 10% p.a. On 31.12.2012,the machinery was sold for Rs 40,000. Prepare machinery account, sinking fund account and sinking fund investment accountfor 2010 to 2012.?
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Ms.Himal Traders purchased machinery on 1.1.2010 for Rs 200,000. Depre...
Machinery Account


  • On 1.1.2010, machinery purchased for Rs 200,000

  • Depreciation rate is 25% p.a. under straight line method

  • Depreciation for the year 2010 = 25% x 200,000 = Rs 50,000

  • Depreciation for the year 2011 = 25% x 200,000 = Rs 50,000

  • Depreciation for the year 2012 = 25% x 200,000 = Rs 50,000

  • On 31.12.2012, machinery sold for Rs 40,000

  • Journal entry for sale of machinery


    • Debit: Bank account - Rs 40,000

    • Credit: Machinery account - Rs 200,000

    • Credit: Depreciation account - Rs 150,000

    • Credit: Profit and Loss account - Rs 10,000




Sinking Fund Account


  • Sinking fund method used for recording depreciation

  • Return on sinking fund investment is 10% p.a.

  • Sinking fund for the year 2010 = 25% x 200,000 = Rs 50,000

  • Amount invested in sinking fund for the year 2010 = Rs 50,000

  • Interest earned on sinking fund investment for the year 2010 = 10% x 50,000 = Rs 5,000

  • Balance in sinking fund account for the year 2010 = Rs 55,000

  • Sinking fund for the year 2011 = 25% x 200,000 = Rs 50,000

  • Amount invested in sinking fund for the year 2011 = Rs 50,000

  • Interest earned on sinking fund investment for the year 2011 = 10% x 50,000 = Rs 5,000

  • Balance in sinking fund account for the year 2011 = Rs 110,000

  • Sinking fund for the year 2012 = 25% x 200,000 = Rs 50,000

  • Amount invested in sinking fund for the year 2012 = Rs 50,000

  • Interest earned on sinking fund investment for the year 2012 = 10% x 50,000 = Rs 5,000

  • Balance in sinking fund account for the year 2012 = Rs 165,000



Sinking Fund Investment Account


  • Amount invested in sinking fund for the year 2010 = Rs 50,000

  • Interest earned on sinking fund
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Ms.Himal Traders purchased machinery on 1.1.2010 for Rs 200,000. Depreciation rate is 25% p.a. under straight line method.Sinking fund method is adopted for recording of depreciation. Return on sinking fund investment is 10% p.a. On 31.12.2012,the machinery was sold for Rs 40,000. Prepare machinery account, sinking fund account and sinking fund investment accountfor 2010 to 2012.?
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Ms.Himal Traders purchased machinery on 1.1.2010 for Rs 200,000. Depreciation rate is 25% p.a. under straight line method.Sinking fund method is adopted for recording of depreciation. Return on sinking fund investment is 10% p.a. On 31.12.2012,the machinery was sold for Rs 40,000. Prepare machinery account, sinking fund account and sinking fund investment accountfor 2010 to 2012.? 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 Ms.Himal Traders purchased machinery on 1.1.2010 for Rs 200,000. Depreciation rate is 25% p.a. under straight line method.Sinking fund method is adopted for recording of depreciation. Return on sinking fund investment is 10% p.a. On 31.12.2012,the machinery was sold for Rs 40,000. Prepare machinery account, sinking fund account and sinking fund investment accountfor 2010 to 2012.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Ms.Himal Traders purchased machinery on 1.1.2010 for Rs 200,000. Depreciation rate is 25% p.a. under straight line method.Sinking fund method is adopted for recording of depreciation. Return on sinking fund investment is 10% p.a. On 31.12.2012,the machinery was sold for Rs 40,000. Prepare machinery account, sinking fund account and sinking fund investment accountfor 2010 to 2012.?.
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