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A company purchased second-hand machinery on 1st May, 2015 for Rs. 5,85,000 and immediately spent
Rs. 15,000 on its erection. On 1st October, 2016, it purchased another machine for Rs. 4,00,000.
On 31st July, 2017, it sold off the first machine for Rs.2,50,000 and bought another for Rs.4,20,000.
On 1st November, 2018, the second machine was also sold off for Rs. 3,00,000. Depreciation was provided on the machinery @ 15% p.a. on Equal Installment Method.
?
Rs. 15,000 on its erection. On 1st October, 2016, it purchased another machine for Rs. 4,00,000.
On 31st July, 2017, it sold off the first machine for Rs.2,50,000 and bought another for Rs.4,20,000.
On 1st November, 2018, the second machine was also sold off for Rs. 3,00,000. Depreciation was provided on the machinery @ 15% p.a. on Equal Installment Method.
?
Most Upvoted Answer
A company purchased second-hand machinery on 1st May, 2015 for Rs. 5,8...
Introduction
In this scenario, we will analyze the purchase, sale, and depreciation of machinery by a company from 2015 to 2018.
Initial Purchases and Costs
- The company purchased the first machine on 1st May 2015 for Rs. 5,85,000.
- Additional erection cost amounted to Rs. 15,000.
- Total cost of the first machine = Rs. 5,85,000 + Rs. 15,000 = Rs. 6,00,000.
Subsequent Purchases
- The second machine was acquired on 1st October 2016 for Rs. 4,00,000.
- On 31st July 2017, the first machine was sold for Rs. 2,50,000.
- A new machine was bought for Rs. 4,20,000 on the same date.
Depreciation Calculation
- Depreciation Rate: 15% p.a. using the Equal Installment Method.
- For the first machine:
- Depreciation for first machine = Rs. 6,00,000 * 15% = Rs. 90,000 per annum.
- Calculate depreciation for 2 years and 3 months (May 2015 to July 2017).
- For the second machine:
- Depreciation from 1st October 2016 to 31st July 2017.
- Depreciation for 9 months = Rs. 4,00,000 * 15% * (9/12) = Rs. 45,000.
Final Transactions
- The second machine was sold on 1st November 2018 for Rs. 3,00,000.
- Consider accumulated depreciation while calculating the book value before sale.
Conclusion
The company efficiently managed the acquisition and disposal of machinery while adhering to accounting principles regarding depreciation. This analysis aids in understanding financial management and asset valuation practices.
In this scenario, we will analyze the purchase, sale, and depreciation of machinery by a company from 2015 to 2018.
Initial Purchases and Costs
- The company purchased the first machine on 1st May 2015 for Rs. 5,85,000.
- Additional erection cost amounted to Rs. 15,000.
- Total cost of the first machine = Rs. 5,85,000 + Rs. 15,000 = Rs. 6,00,000.
Subsequent Purchases
- The second machine was acquired on 1st October 2016 for Rs. 4,00,000.
- On 31st July 2017, the first machine was sold for Rs. 2,50,000.
- A new machine was bought for Rs. 4,20,000 on the same date.
Depreciation Calculation
- Depreciation Rate: 15% p.a. using the Equal Installment Method.
- For the first machine:
- Depreciation for first machine = Rs. 6,00,000 * 15% = Rs. 90,000 per annum.
- Calculate depreciation for 2 years and 3 months (May 2015 to July 2017).
- For the second machine:
- Depreciation from 1st October 2016 to 31st July 2017.
- Depreciation for 9 months = Rs. 4,00,000 * 15% * (9/12) = Rs. 45,000.
Final Transactions
- The second machine was sold on 1st November 2018 for Rs. 3,00,000.
- Consider accumulated depreciation while calculating the book value before sale.
Conclusion
The company efficiently managed the acquisition and disposal of machinery while adhering to accounting principles regarding depreciation. This analysis aids in understanding financial management and asset valuation practices.
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A company purchased second-hand machinery on 1st May, 2015 for Rs. 5,85,000 and immediately spentRs. 15,000 on its erection. On 1st October, 2016, it purchased another machine for Rs. 4,00,000.On 31st July, 2017, it sold off the first machine for Rs.2,50,000 and bought another for Rs.4,20,000.On 1st November, 2018, the second machine was also sold off for Rs. 3,00,000. Depreciation was provided on the machinery @ 15% p.a. on Equal Installment Method.?
Question Description
A company purchased second-hand machinery on 1st May, 2015 for Rs. 5,85,000 and immediately spentRs. 15,000 on its erection. On 1st October, 2016, it purchased another machine for Rs. 4,00,000.On 31st July, 2017, it sold off the first machine for Rs.2,50,000 and bought another for Rs.4,20,000.On 1st November, 2018, the second machine was also sold off for Rs. 3,00,000. Depreciation was provided on the machinery @ 15% p.a. on Equal Installment Method.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A company purchased second-hand machinery on 1st May, 2015 for Rs. 5,85,000 and immediately spentRs. 15,000 on its erection. On 1st October, 2016, it purchased another machine for Rs. 4,00,000.On 31st July, 2017, it sold off the first machine for Rs.2,50,000 and bought another for Rs.4,20,000.On 1st November, 2018, the second machine was also sold off for Rs. 3,00,000. Depreciation was provided on the machinery @ 15% p.a. on Equal Installment Method.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company purchased second-hand machinery on 1st May, 2015 for Rs. 5,85,000 and immediately spentRs. 15,000 on its erection. On 1st October, 2016, it purchased another machine for Rs. 4,00,000.On 31st July, 2017, it sold off the first machine for Rs.2,50,000 and bought another for Rs.4,20,000.On 1st November, 2018, the second machine was also sold off for Rs. 3,00,000. Depreciation was provided on the machinery @ 15% p.a. on Equal Installment Method.?.
A company purchased second-hand machinery on 1st May, 2015 for Rs. 5,85,000 and immediately spentRs. 15,000 on its erection. On 1st October, 2016, it purchased another machine for Rs. 4,00,000.On 31st July, 2017, it sold off the first machine for Rs.2,50,000 and bought another for Rs.4,20,000.On 1st November, 2018, the second machine was also sold off for Rs. 3,00,000. Depreciation was provided on the machinery @ 15% p.a. on Equal Installment Method.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A company purchased second-hand machinery on 1st May, 2015 for Rs. 5,85,000 and immediately spentRs. 15,000 on its erection. On 1st October, 2016, it purchased another machine for Rs. 4,00,000.On 31st July, 2017, it sold off the first machine for Rs.2,50,000 and bought another for Rs.4,20,000.On 1st November, 2018, the second machine was also sold off for Rs. 3,00,000. Depreciation was provided on the machinery @ 15% p.a. on Equal Installment Method.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company purchased second-hand machinery on 1st May, 2015 for Rs. 5,85,000 and immediately spentRs. 15,000 on its erection. On 1st October, 2016, it purchased another machine for Rs. 4,00,000.On 31st July, 2017, it sold off the first machine for Rs.2,50,000 and bought another for Rs.4,20,000.On 1st November, 2018, the second machine was also sold off for Rs. 3,00,000. Depreciation was provided on the machinery @ 15% p.a. on Equal Installment Method.?.
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A company purchased second-hand machinery on 1st May, 2015 for Rs. 5,85,000 and immediately spentRs. 15,000 on its erection. On 1st October, 2016, it purchased another machine for Rs. 4,00,000.On 31st July, 2017, it sold off the first machine for Rs.2,50,000 and bought another for Rs.4,20,000.On 1st November, 2018, the second machine was also sold off for Rs. 3,00,000. Depreciation was provided on the machinery @ 15% p.a. on Equal Installment Method.?, a detailed solution for A company purchased second-hand machinery on 1st May, 2015 for Rs. 5,85,000 and immediately spentRs. 15,000 on its erection. On 1st October, 2016, it purchased another machine for Rs. 4,00,000.On 31st July, 2017, it sold off the first machine for Rs.2,50,000 and bought another for Rs.4,20,000.On 1st November, 2018, the second machine was also sold off for Rs. 3,00,000. Depreciation was provided on the machinery @ 15% p.a. on Equal Installment Method.? has been provided alongside types of A company purchased second-hand machinery on 1st May, 2015 for Rs. 5,85,000 and immediately spentRs. 15,000 on its erection. On 1st October, 2016, it purchased another machine for Rs. 4,00,000.On 31st July, 2017, it sold off the first machine for Rs.2,50,000 and bought another for Rs.4,20,000.On 1st November, 2018, the second machine was also sold off for Rs. 3,00,000. Depreciation was provided on the machinery @ 15% p.a. on Equal Installment Method.? theory, EduRev gives you an
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