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A company purchased second hand machinery on 1 January, 2019 for Rs. 3,00,000, subsequent to which Rs. 60,000 and Rs. 40,000 were spent on its repairs and installation, respectively On 1 July, 2020 another machinery was purchased for Rs. 2,60,000. On 1 July 2021, the first machinery having?
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A company purchased second hand machinery on 1 January, 2019 for Rs. 3...
Purchase of First Machinery
The company acquired second-hand machinery on **1 January 2019** for **Rs. 3,00,000**. Additional costs were incurred for repairs and installation, which are capitalized to the asset's value.
Breakdown of Costs:
- **Purchase Price:** Rs. 3,00,000
- **Repairs:** Rs. 60,000
- **Installation:** Rs. 40,000
Total Cost of First Machinery:
- **Total Cost = Purchase Price + Repairs + Installation**
- **Total Cost = Rs. 3,00,000 + Rs. 60,000 + Rs. 40,000 = Rs. 4,00,000**
Purchase of Second Machinery
On **1 July 2020**, the company purchased another machinery for **Rs. 2,60,000**. This transaction is independent of the first machinery and adds to the company’s assets.
Disposal of First Machinery
On **1 July 2021**, the first machinery was disposed of. To determine the financial implications, consider the following:
- **Depreciation:** Calculate based on the useful life as per the company’s policy. For example, if the useful life is 10 years, annual depreciation would be Rs. 40,000 (Rs. 4,00,000 / 10 years).
- **Book Value at Disposal:** Subtract accumulated depreciation from the total cost.
- **Gain/Loss on Disposal:** Compare the book value with the sale proceeds or any residual value received.
Conclusion
Understanding the financial implications of machinery purchase, maintenance, and disposal is crucial for assessing the company's asset management strategy. Accurate record-keeping and adherence to accounting principles ensure an effective evaluation of the company’s financial health.
The company acquired second-hand machinery on **1 January 2019** for **Rs. 3,00,000**. Additional costs were incurred for repairs and installation, which are capitalized to the asset's value.
Breakdown of Costs:
- **Purchase Price:** Rs. 3,00,000
- **Repairs:** Rs. 60,000
- **Installation:** Rs. 40,000
Total Cost of First Machinery:
- **Total Cost = Purchase Price + Repairs + Installation**
- **Total Cost = Rs. 3,00,000 + Rs. 60,000 + Rs. 40,000 = Rs. 4,00,000**
Purchase of Second Machinery
On **1 July 2020**, the company purchased another machinery for **Rs. 2,60,000**. This transaction is independent of the first machinery and adds to the company’s assets.
Disposal of First Machinery
On **1 July 2021**, the first machinery was disposed of. To determine the financial implications, consider the following:
- **Depreciation:** Calculate based on the useful life as per the company’s policy. For example, if the useful life is 10 years, annual depreciation would be Rs. 40,000 (Rs. 4,00,000 / 10 years).
- **Book Value at Disposal:** Subtract accumulated depreciation from the total cost.
- **Gain/Loss on Disposal:** Compare the book value with the sale proceeds or any residual value received.
Conclusion
Understanding the financial implications of machinery purchase, maintenance, and disposal is crucial for assessing the company's asset management strategy. Accurate record-keeping and adherence to accounting principles ensure an effective evaluation of the company’s financial health.
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A company purchased second hand machinery on 1 January, 2019 for Rs. 3,00,000, subsequent to which Rs. 60,000 and Rs. 40,000 were spent on its repairs and installation, respectively On 1 July, 2020 another machinery was purchased for Rs. 2,60,000. On 1 July 2021, the first machinery having?
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A company purchased second hand machinery on 1 January, 2019 for Rs. 3,00,000, subsequent to which Rs. 60,000 and Rs. 40,000 were spent on its repairs and installation, respectively On 1 July, 2020 another machinery was purchased for Rs. 2,60,000. On 1 July 2021, the first machinery having? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about A company purchased second hand machinery on 1 January, 2019 for Rs. 3,00,000, subsequent to which Rs. 60,000 and Rs. 40,000 were spent on its repairs and installation, respectively On 1 July, 2020 another machinery was purchased for Rs. 2,60,000. On 1 July 2021, the first machinery having? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company purchased second hand machinery on 1 January, 2019 for Rs. 3,00,000, subsequent to which Rs. 60,000 and Rs. 40,000 were spent on its repairs and installation, respectively On 1 July, 2020 another machinery was purchased for Rs. 2,60,000. On 1 July 2021, the first machinery having?.
A company purchased second hand machinery on 1 January, 2019 for Rs. 3,00,000, subsequent to which Rs. 60,000 and Rs. 40,000 were spent on its repairs and installation, respectively On 1 July, 2020 another machinery was purchased for Rs. 2,60,000. On 1 July 2021, the first machinery having? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about A company purchased second hand machinery on 1 January, 2019 for Rs. 3,00,000, subsequent to which Rs. 60,000 and Rs. 40,000 were spent on its repairs and installation, respectively On 1 July, 2020 another machinery was purchased for Rs. 2,60,000. On 1 July 2021, the first machinery having? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company purchased second hand machinery on 1 January, 2019 for Rs. 3,00,000, subsequent to which Rs. 60,000 and Rs. 40,000 were spent on its repairs and installation, respectively On 1 July, 2020 another machinery was purchased for Rs. 2,60,000. On 1 July 2021, the first machinery having?.
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A company purchased second hand machinery on 1 January, 2019 for Rs. 3,00,000, subsequent to which Rs. 60,000 and Rs. 40,000 were spent on its repairs and installation, respectively On 1 July, 2020 another machinery was purchased for Rs. 2,60,000. On 1 July 2021, the first machinery having?, a detailed solution for A company purchased second hand machinery on 1 January, 2019 for Rs. 3,00,000, subsequent to which Rs. 60,000 and Rs. 40,000 were spent on its repairs and installation, respectively On 1 July, 2020 another machinery was purchased for Rs. 2,60,000. On 1 July 2021, the first machinery having? has been provided alongside types of A company purchased second hand machinery on 1 January, 2019 for Rs. 3,00,000, subsequent to which Rs. 60,000 and Rs. 40,000 were spent on its repairs and installation, respectively On 1 July, 2020 another machinery was purchased for Rs. 2,60,000. On 1 July 2021, the first machinery having? theory, EduRev gives you an
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