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A Machinery was purchased for 40,000 on 1st Jan, 2009 and spent 4,000 on its erection.
The estimated effective life of the machine is 10 years with break up value of 3,000. Prepare Machinery Account providing Depreciation for 5 years by Fixed Instalment Method.?
The estimated effective life of the machine is 10 years with break up value of 3,000. Prepare Machinery Account providing Depreciation for 5 years by Fixed Instalment Method.?
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A Machinery was purchased for 40,000 on 1st Jan, 2009 and spent 4,000 ...
Purchase Details
- Machinery Cost: 40,000
- Erection Cost: 4,000
- Total Cost of Machinery: 44,000
- Estimated Life: 10 years
- Break-Up Value: 3,000
Depreciation Calculation
- Depreciable Amount = Total Cost - Break-Up Value
- Depreciable Amount = 44,000 - 3,000 = 41,000
- Annual Depreciation = Depreciable Amount / Effective Life
- Annual Depreciation = 41,000 / 10 = 4,100
Machinery Account for 5 Years
- Yearly Depreciation Entries:
- Year 1 (2009):
- Depreciation Expense: 4,100
- Closing Book Value: 44,000 - 4,100 = 39,900
- Year 2 (2010):
- Depreciation Expense: 4,100
- Closing Book Value: 39,900 - 4,100 = 35,800
- Year 3 (2011):
- Depreciation Expense: 4,100
- Closing Book Value: 35,800 - 4,100 = 31,700
- Year 4 (2012):
- Depreciation Expense: 4,100
- Closing Book Value: 31,700 - 4,100 = 27,600
- Year 5 (2013):
- Depreciation Expense: 4,100
- Closing Book Value: 27,600 - 4,100 = 23,500
Summary of Depreciation
- Total Depreciation over 5 Years:
- 4,100 x 5 = 20,500
- Book Value at End of 5 Years:
- 44,000 - 20,500 = 23,500
This structured approach provides clarity on the machinery account while illustrating the fixed installment method of depreciation across five years.
- Machinery Cost: 40,000
- Erection Cost: 4,000
- Total Cost of Machinery: 44,000
- Estimated Life: 10 years
- Break-Up Value: 3,000
Depreciation Calculation
- Depreciable Amount = Total Cost - Break-Up Value
- Depreciable Amount = 44,000 - 3,000 = 41,000
- Annual Depreciation = Depreciable Amount / Effective Life
- Annual Depreciation = 41,000 / 10 = 4,100
Machinery Account for 5 Years
- Yearly Depreciation Entries:
- Year 1 (2009):
- Depreciation Expense: 4,100
- Closing Book Value: 44,000 - 4,100 = 39,900
- Year 2 (2010):
- Depreciation Expense: 4,100
- Closing Book Value: 39,900 - 4,100 = 35,800
- Year 3 (2011):
- Depreciation Expense: 4,100
- Closing Book Value: 35,800 - 4,100 = 31,700
- Year 4 (2012):
- Depreciation Expense: 4,100
- Closing Book Value: 31,700 - 4,100 = 27,600
- Year 5 (2013):
- Depreciation Expense: 4,100
- Closing Book Value: 27,600 - 4,100 = 23,500
Summary of Depreciation
- Total Depreciation over 5 Years:
- 4,100 x 5 = 20,500
- Book Value at End of 5 Years:
- 44,000 - 20,500 = 23,500
This structured approach provides clarity on the machinery account while illustrating the fixed installment method of depreciation across five years.
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A Machinery was purchased for 40,000 on 1st Jan, 2009 and spent 4,000 on its erection. The estimated effective life of the machine is 10 years with break up value of 3,000. Prepare Machinery Account providing Depreciation for 5 years by Fixed Instalment Method.?
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A Machinery was purchased for 40,000 on 1st Jan, 2009 and spent 4,000 on its erection. The estimated effective life of the machine is 10 years with break up value of 3,000. Prepare Machinery Account providing Depreciation for 5 years by Fixed Instalment Method.? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about A Machinery was purchased for 40,000 on 1st Jan, 2009 and spent 4,000 on its erection. The estimated effective life of the machine is 10 years with break up value of 3,000. Prepare Machinery Account providing Depreciation for 5 years by Fixed Instalment Method.? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A Machinery was purchased for 40,000 on 1st Jan, 2009 and spent 4,000 on its erection. The estimated effective life of the machine is 10 years with break up value of 3,000. Prepare Machinery Account providing Depreciation for 5 years by Fixed Instalment Method.?.
A Machinery was purchased for 40,000 on 1st Jan, 2009 and spent 4,000 on its erection. The estimated effective life of the machine is 10 years with break up value of 3,000. Prepare Machinery Account providing Depreciation for 5 years by Fixed Instalment Method.? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about A Machinery was purchased for 40,000 on 1st Jan, 2009 and spent 4,000 on its erection. The estimated effective life of the machine is 10 years with break up value of 3,000. Prepare Machinery Account providing Depreciation for 5 years by Fixed Instalment Method.? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A Machinery was purchased for 40,000 on 1st Jan, 2009 and spent 4,000 on its erection. The estimated effective life of the machine is 10 years with break up value of 3,000. Prepare Machinery Account providing Depreciation for 5 years by Fixed Instalment Method.?.
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