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A firm purchased a second hand machine on 1st April, 2018 and paid Rs. 140000 for it . on its over hauling and installation spent Rs. 20000. on 1st October, 2018 another machine costing Rs. 80000 was purchased . on 1st October. 2020 the machine purchased on 1st April, 2018 was disposed off for Rs. 104000 and new machine costing Rs.200000 was installed . Depreciation was provided @ 10% per annum by straight line method.?
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A firm purchased a second hand machine on 1st April, 2018 and paid Rs....
Machine Purchase and Costs
The firm purchased a second-hand machine on 1st April 2018 for Rs. 140,000. Additional costs incurred for overhauling and installation amounted to Rs. 20,000. Therefore, the total cost of the first machine is:
- Total Cost of Machine 1: Rs. 140,000 + Rs. 20,000 = Rs. 160,000
On 1st October 2018, a second machine was purchased for Rs. 80,000.
- Total Cost of Machine 2: Rs. 80,000
Depreciation Calculation
Depreciation is calculated using the Straight Line Method at a rate of 10% per annum.
- Machine 1:
- Cost: Rs. 160,000
- Useful Life: 10 years
- Annual Depreciation: Rs. 160,000 x 10% = Rs. 16,000
- Machine 2:
- Cost: Rs. 80,000
- Useful Life: 10 years
- Annual Depreciation: Rs. 80,000 x 10% = Rs. 8,000
Depreciation Periods
1. For Machine 1 (1st April 2018 to 1st October 2020):
- Duration: 2.5 years
- Total Depreciation: Rs. 16,000 x 2.5 = Rs. 40,000
2. For Machine 2 (1st October 2018 to 1st October 2020):
- Duration: 2 years
- Total Depreciation: Rs. 8,000 x 2 = Rs. 16,000
Disposal of Machine 1
On 1st October 2020, Machine 1 was disposed of for Rs. 104,000. The book value at the time of disposal is:
- Book Value: Rs. 160,000 - Rs. 40,000 = Rs. 120,000
- Profit/Loss on Disposal: Rs. 104,000 - Rs. 120,000 = Loss of Rs. 16,000
New Machine Purchase
A new machine costing Rs. 200,000 was installed on the same date (1st October 2020). The depreciation for this machine will also follow the same rate.
This summarises the transactions and their financial implications for the firm regarding machinery purchases and depreciation.
The firm purchased a second-hand machine on 1st April 2018 for Rs. 140,000. Additional costs incurred for overhauling and installation amounted to Rs. 20,000. Therefore, the total cost of the first machine is:
- Total Cost of Machine 1: Rs. 140,000 + Rs. 20,000 = Rs. 160,000
On 1st October 2018, a second machine was purchased for Rs. 80,000.
- Total Cost of Machine 2: Rs. 80,000
Depreciation Calculation
Depreciation is calculated using the Straight Line Method at a rate of 10% per annum.
- Machine 1:
- Cost: Rs. 160,000
- Useful Life: 10 years
- Annual Depreciation: Rs. 160,000 x 10% = Rs. 16,000
- Machine 2:
- Cost: Rs. 80,000
- Useful Life: 10 years
- Annual Depreciation: Rs. 80,000 x 10% = Rs. 8,000
Depreciation Periods
1. For Machine 1 (1st April 2018 to 1st October 2020):
- Duration: 2.5 years
- Total Depreciation: Rs. 16,000 x 2.5 = Rs. 40,000
2. For Machine 2 (1st October 2018 to 1st October 2020):
- Duration: 2 years
- Total Depreciation: Rs. 8,000 x 2 = Rs. 16,000
Disposal of Machine 1
On 1st October 2020, Machine 1 was disposed of for Rs. 104,000. The book value at the time of disposal is:
- Book Value: Rs. 160,000 - Rs. 40,000 = Rs. 120,000
- Profit/Loss on Disposal: Rs. 104,000 - Rs. 120,000 = Loss of Rs. 16,000
New Machine Purchase
A new machine costing Rs. 200,000 was installed on the same date (1st October 2020). The depreciation for this machine will also follow the same rate.
This summarises the transactions and their financial implications for the firm regarding machinery purchases and depreciation.
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A firm purchased a second hand machine on 1st April, 2018 and paid Rs. 140000 for it . on its over hauling and installation spent Rs. 20000. on 1st October, 2018 another machine costing Rs. 80000 was purchased . on 1st October. 2020 the machine purchased on 1st April, 2018 was disposed off for Rs. 104000 and new machine costing Rs.200000 was installed . Depreciation was provided @ 10% per annum by straight line method.?
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A firm purchased a second hand machine on 1st April, 2018 and paid Rs. 140000 for it . on its over hauling and installation spent Rs. 20000. on 1st October, 2018 another machine costing Rs. 80000 was purchased . on 1st October. 2020 the machine purchased on 1st April, 2018 was disposed off for Rs. 104000 and new machine costing Rs.200000 was installed . Depreciation was provided @ 10% per annum by straight line method.? 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 A firm purchased a second hand machine on 1st April, 2018 and paid Rs. 140000 for it . on its over hauling and installation spent Rs. 20000. on 1st October, 2018 another machine costing Rs. 80000 was purchased . on 1st October. 2020 the machine purchased on 1st April, 2018 was disposed off for Rs. 104000 and new machine costing Rs.200000 was installed . Depreciation was provided @ 10% per annum by straight line method.? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A firm purchased a second hand machine on 1st April, 2018 and paid Rs. 140000 for it . on its over hauling and installation spent Rs. 20000. on 1st October, 2018 another machine costing Rs. 80000 was purchased . on 1st October. 2020 the machine purchased on 1st April, 2018 was disposed off for Rs. 104000 and new machine costing Rs.200000 was installed . Depreciation was provided @ 10% per annum by straight line method.?.
A firm purchased a second hand machine on 1st April, 2018 and paid Rs. 140000 for it . on its over hauling and installation spent Rs. 20000. on 1st October, 2018 another machine costing Rs. 80000 was purchased . on 1st October. 2020 the machine purchased on 1st April, 2018 was disposed off for Rs. 104000 and new machine costing Rs.200000 was installed . Depreciation was provided @ 10% per annum by straight line method.? 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 A firm purchased a second hand machine on 1st April, 2018 and paid Rs. 140000 for it . on its over hauling and installation spent Rs. 20000. on 1st October, 2018 another machine costing Rs. 80000 was purchased . on 1st October. 2020 the machine purchased on 1st April, 2018 was disposed off for Rs. 104000 and new machine costing Rs.200000 was installed . Depreciation was provided @ 10% per annum by straight line method.? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A firm purchased a second hand machine on 1st April, 2018 and paid Rs. 140000 for it . on its over hauling and installation spent Rs. 20000. on 1st October, 2018 another machine costing Rs. 80000 was purchased . on 1st October. 2020 the machine purchased on 1st April, 2018 was disposed off for Rs. 104000 and new machine costing Rs.200000 was installed . Depreciation was provided @ 10% per annum by straight line method.?.
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