Machinery A/ c
Date Particulars Amount Date Particulars Amount
2022-
23
April 1
Oct 1
To Balance b/d OLD
To Bank A/c New
[1,50,000 + 8,000]
9,72,000
1,58,000
2022-
23
Oct 1st
Mar 31
By Depreciation A/c
By Bank A/c
By Profit & Loss A/c (2)
By Profit & Loss A/c (3)
(Additional
Depreciation)
By Depreciation A/c
OLD 1,12,000
NEW 7,900
By Balance c/ d
Old 7,84,000
New 1,50,100
4,000
45,000
15,000
12,000
1,19,900
9,34,100
TOTAL 11,30,000 TOTAL 11,30,000
Note: Above solution is based upon change of method with retrospective effect as per
requirement of the question how ever at present in depreciation accounting change of
method is allowed on the basis of prospective effect only as per AS 10.
Working Notes:
1. Calculation of WDV as on 1 April, 2020
9,72,000 x 100/90 x 100/90 = Rs. 12,00,000.
2. Calculation of profit & loss on Sale of Machinery Amount
Cost of Machine as on 1st April 2020 80,000
Less: Depreciation @ 10% SLM (8,000)
WDV as on 31st March, 2021 72,000
Less: Depreciation @ 10% SLM (8,000)
WDV as on 31st March, 2022 64,000
Less: Depreciation for 6 months (4,000)
WDV as on 1st Oct, 2022 60,000
Less: Sold 45,000
Loss on Sale of Machinery 15,000
3. Calculation of Depreciation for year 2022-23
(a) On Machines (Other than sold one) existing as on 1st April, 2022
@ 10% on [(Rs. 12,00,000(1))- 80,000] 1,12,000
(b) On Machine purchased on 1st Oct, 2022 @ 10% on
(1,58,000 for 6 months) 7,900
1,19,900
4. Calculation of Difference in the amount of depreciation under old method and New
Method on the Machineries
(a) Depreciation on SLM basis for 2 years [12,00,000 X 10% X 2] 2,40,000
(b) Depreciation on W.D.V. basis for 2 years
for 2020 -21 on Rs. 12,00,000 1,20,000
for 2021-22 on Rs. 10,80,000 1,08,000 2,28,000
(c) Difference to be adjusted (a- b) = Rs. 12,000