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Mohan purchased a machinery at 50,000 on 1st January ,2016. 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% . Accounts are closed on 31st December every years.?
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Mohan purchased a machinery at 50,000 on 1st January ,2016. An other m...
Machinery Account
Year 1: 2016
- Opening balance: 0
- Purchase of machinery on 1st January: 50,000
- Depreciation for 6 months (January to June) at 10%: 50,000 * 10% * 6/12 = 2,500
- Closing balance: 50,000 - 2,500 = 47,500
Year 2: 2017
- Opening balance: 47,500
- Purchase of machinery on 1st July: 30,000
- Depreciation for 12 months at 10%: (47,500 + 30,000) * 10% = 7,750
- Closing balance: 77,500 - 7,750 = 69,750
Year 3: 2018
- Opening balance: 69,750
- Depreciation for 12 months at 10%: 69,750 * 10% = 6,975
- Closing balance: 69,750 - 6,975 = 62,775
Explanation:
The Machinery Account is used to record the transactions related to the purchase and depreciation of machinery. The account is maintained for a period of three years, with the accounts being closed on 31st December each year. The depreciation is charged using the straight-line method, where the same amount is deducted as depreciation each year.
In the first year, Mohan purchased a machinery for 50,000 on 1st January 2016. Since the accounts are closed on 31st December, the machinery is considered as an opening balance for that year. The depreciation for the first six months (January to June) is calculated by multiplying the cost of machinery by the depreciation rate (10%) and dividing it by 12. The closing balance for the year is obtained by subtracting the depreciation from the opening balance.
In the second year, Mohan purchased another machinery for 30,000 on 1st July. This amount is added to the opening balance for the year. The depreciation for the entire year is calculated by multiplying the total value of machinery (opening balance + purchase) by the depreciation rate. The closing balance for the year is obtained by subtracting the depreciation from the opening balance.
In the third year, there is no purchase of machinery. The opening balance for the year is taken as the previous year's closing balance. The depreciation for the entire year is calculated by multiplying the opening balance by the depreciation rate. The closing balance for the year is obtained by subtracting the depreciation from the opening balance.
This process is repeated for each year, and the Machinery Account is updated accordingly. The final closing balance in the account represents the value of machinery after three years, taking into account the depreciation charged each year.
Year 1: 2016
- Opening balance: 0
- Purchase of machinery on 1st January: 50,000
- Depreciation for 6 months (January to June) at 10%: 50,000 * 10% * 6/12 = 2,500
- Closing balance: 50,000 - 2,500 = 47,500
Year 2: 2017
- Opening balance: 47,500
- Purchase of machinery on 1st July: 30,000
- Depreciation for 12 months at 10%: (47,500 + 30,000) * 10% = 7,750
- Closing balance: 77,500 - 7,750 = 69,750
Year 3: 2018
- Opening balance: 69,750
- Depreciation for 12 months at 10%: 69,750 * 10% = 6,975
- Closing balance: 69,750 - 6,975 = 62,775
Explanation:
The Machinery Account is used to record the transactions related to the purchase and depreciation of machinery. The account is maintained for a period of three years, with the accounts being closed on 31st December each year. The depreciation is charged using the straight-line method, where the same amount is deducted as depreciation each year.
In the first year, Mohan purchased a machinery for 50,000 on 1st January 2016. Since the accounts are closed on 31st December, the machinery is considered as an opening balance for that year. The depreciation for the first six months (January to June) is calculated by multiplying the cost of machinery by the depreciation rate (10%) and dividing it by 12. The closing balance for the year is obtained by subtracting the depreciation from the opening balance.
In the second year, Mohan purchased another machinery for 30,000 on 1st July. This amount is added to the opening balance for the year. The depreciation for the entire year is calculated by multiplying the total value of machinery (opening balance + purchase) by the depreciation rate. The closing balance for the year is obtained by subtracting the depreciation from the opening balance.
In the third year, there is no purchase of machinery. The opening balance for the year is taken as the previous year's closing balance. The depreciation for the entire year is calculated by multiplying the opening balance by the depreciation rate. The closing balance for the year is obtained by subtracting the depreciation from the opening balance.
This process is repeated for each year, and the Machinery Account is updated accordingly. The final closing balance in the account represents the value of machinery after three years, taking into account the depreciation charged each year.
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Mohan purchased a machinery at 50,000 on 1st January ,2016. 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% . Accounts are closed on 31st December every years.?
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Mohan purchased a machinery at 50,000 on 1st January ,2016. 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% . Accounts are closed on 31st December every years.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Mohan purchased a machinery at 50,000 on 1st January ,2016. 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% . Accounts are closed on 31st December every years.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Mohan purchased a machinery at 50,000 on 1st January ,2016. 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% . Accounts are closed on 31st December every years.?.
Mohan purchased a machinery at 50,000 on 1st January ,2016. 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% . Accounts are closed on 31st December every years.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Mohan purchased a machinery at 50,000 on 1st January ,2016. 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% . Accounts are closed on 31st December every years.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Mohan purchased a machinery at 50,000 on 1st January ,2016. 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% . Accounts are closed on 31st December every years.?.
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Mohan purchased a machinery at 50,000 on 1st January ,2016. 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% . Accounts are closed on 31st December every years.?, a detailed solution for Mohan purchased a machinery at 50,000 on 1st January ,2016. 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% . Accounts are closed on 31st December every years.? has been provided alongside types of Mohan purchased a machinery at 50,000 on 1st January ,2016. 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% . Accounts are closed on 31st December every years.? theory, EduRev gives you an
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