Chandra Ltd purchased a second hand machine for Rs 8000 on 1 july, 2009 They spent Rs 3500 - Accountancy - Depreciation Provisions and Reserves

Question

Chandra Ltd purchased a second hand machine for Rs 8000 on 1 july,
2009 They spent Rs 3500 on its overhaul and installation
Depriciation is written off 10% p a on the original cost On 30th
September , 2012, the machine was found to be unsuitable and sold
for Rs 6500 Prepare the machinary A/c for four years assuming that
accounts are closed on 31 march

Shailender Bali · Answer

1 July 2009 Machinery A/c Dr Side To Cash 8000
1 July 2009 Machinery A/c Dr Side To Cash 3500
31 Mar 2010 Machinery A/c Cr Side By Depreciation 862 50
(11500 X 10% X 9/12) Depreciation to be calculated for 9 months
31 March 2010 Machinery A/c Cr Side By Balance c/d 10637 50

1 April 2010 Machinery A/c Dr Side To Balance b/d 10637 50
31 March 2011 Machinery A/c Cr Side By Depreciation 1150
31 March 2011 Machinery A/c Cr Side By Balance c/d 9487 50

1 April 2011 Machinery A/c Dr Side To Balance b/d 9487 50
31 March 2012 Machinery A/c Cr Side By Depreciation 1150
31 March 2012 Machinery A/c Cr Side By Balance c/d 8337 50

1 April 2012 Machinery A/c Dr Side To Balance b/d 8337 50
30 Sep 2012 Machinery A/c Cr Side By Depreciation 575
(Depreciation till 30 Sep 2012 i e for 6 months)
30 Sep 2012 Machinery A/c Cr Side By Cash 6500
30 Sep 2012 Machinery A/c Cr Side By Profit & Loss a/c 1262
50
There is a loss on sale of machinery to the extent of 1262 50, this
will be transferred to Profit & Loss a/c)