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On 1st April, 2007, a limited company purchased a Machine for 1,90,000 and spent 10,000 on its installation. At the date of purchase,
it was estimated that the scrap value of the machine would be 50,000 at the end of sixth year. Give Machine Account and Depreciation A/c in the books of the Company for 4 years after providing depreciation by Fixed Installment Method. The books are closed on 31st March every year.?
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On 1st April, 2007, a limited company purchased a Machine for 1,90,000...
Machine Purchase Details
- Purchase Price: 1,90,000
- Installation Cost: 10,000
- Total Cost of Machine: 2,00,000 (1,90,000 + 10,000)
- Estimated Scrap Value: 50,000
- Useful Life: 6 years
Depreciation Calculation
- Depreciable Amount:
- Total Cost - Scrap Value = 2,00,000 - 50,000 = 1,50,000
- Annual Depreciation:
- Depreciable Amount / Useful Life = 1,50,000 / 6 = 25,000
Machine Account
| Date | Particulars | Debit (Rs.) | Credit (Rs.) |
|------------------|-------------------|-------------|--------------|
| 01-Apr-2007 | To Bank | 2,00,000 | |
| 31-Mar-2008 | By Depreciation A/c| | 25,000 |
| 31-Mar-2009 | By Depreciation A/c| | 25,000 |
| 31-Mar-2010 | By Depreciation A/c| | 25,000 |
| 31-Mar-2011 | By Depreciation A/c| | 25,000 |
Depreciation Account
| Date | Particulars | Debit (Rs.) | Credit (Rs.) |
|------------------|-------------------|-------------|--------------|
| 31-Mar-2008 | To Machine A/c | 25,000 | |
| 31-Mar-2009 | To Machine A/c | 25,000 | |
| 31-Mar-2010 | To Machine A/c | 25,000 | |
| 31-Mar-2011 | To Machine A/c | 25,000 | |
Summary
- The machine is depreciated by 25,000 annually for 4 years.
- The Machine Account reflects the purchase and installation costs, along with annual depreciation.
- The Depreciation Account shows the reduction in value of the machine over the years.
This method ensures accurate financial reporting and asset valuation in accordance with accounting principles.
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On 1st April, 2007, a limited company purchased a Machine for 1,90,000 and spent 10,000 on its installation. At the date of purchase,it was estimated that the scrap value of the machine would be 50,000 at the end of sixth year. Give Machine Account and Depreciation A/c in the books of the Company for 4 years after providing depreciation by Fixed Installment Method. The books are closed on 31st March every year.?
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On 1st April, 2007, a limited company purchased a Machine for 1,90,000 and spent 10,000 on its installation. At the date of purchase,it was estimated that the scrap value of the machine would be 50,000 at the end of sixth year. Give Machine Account and Depreciation A/c in the books of the Company for 4 years after providing depreciation by Fixed Installment Method. The books are closed on 31st March every year.? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about On 1st April, 2007, a limited company purchased a Machine for 1,90,000 and spent 10,000 on its installation. At the date of purchase,it was estimated that the scrap value of the machine would be 50,000 at the end of sixth year. Give Machine Account and Depreciation A/c in the books of the Company for 4 years after providing depreciation by Fixed Installment Method. The books are closed on 31st March every year.? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1st April, 2007, a limited company purchased a Machine for 1,90,000 and spent 10,000 on its installation. At the date of purchase,it was estimated that the scrap value of the machine would be 50,000 at the end of sixth year. Give Machine Account and Depreciation A/c in the books of the Company for 4 years after providing depreciation by Fixed Installment Method. The books are closed on 31st March every year.?.
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