Question

A company purchased on 1st July, 2015 machinery costing Rs 30,000. It further purchased machinery on 1st January, 2016 costing Rs 20,000 and on. 1st October, 2016 costing Rs 10,000. On 1st April, 2017, one-third of the machinery installed on 1st July, 2015 became obsolete and was sold for Rs 3,000. The company follows financial year as accounting year. Show how the Machinery Account would appear in the books of company if depreciation is charged `"@ "10%` p.a. on Written Down Value Method.

Answer 1

Correct Answer - [Balance of Machinery A/c- Rs 39,330 (Mach. I: Rs 14,985; Mach. II: Rs 15,795; Mach. III: Rs 8,550); `"Loss on Sale of Machine"` (Mach. I) `(1//3):` Rs 5,325.]
`" Balance on 1st April, 2017 ": Mach. I (2//3)- Rs 16,650 and Mach. I (1//3)- Rs 8,325, Mach. II- Rs 17,550, Mach. III- Rs 9,500. Depreciation (2017-18)-Mach. I (2//3) Rs 1,665, Mach. II Rs 1,755, Mach. III Rs 950.`