From the following transactions of a concern, prepare the Machinery Account for the year ending 31st Dec. 2022: 01-01-21 Purchased a second-hand, M...

Question

From the following transactions of a concern, prepare the Machinery Account for the year ending 31st Dec. 2022: 01-01-21 Purchased a second-hand, Machinery for Rs. 2,00,000 01-01-21 Spent 50;000 on repairs for making it serviceable 30-06-21 Purchased additional new machinery for 3,50,000 30-06-21 Installation charges of new machine 15,000 01-04-22 Repairs & maintenance of Machinery 30,000 30-06-22 Sold second hand Machinery purchased 01-01-21 for 55,000. 31-12-22 Depreciate the Machinery at 10% per annum by WDV Method [Dec 2023, 5 Marks]

Accepted Answer

Option : Correct Option. Solution: Machinery Account | Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) | | :--- | :--- | ---: | :--- | :--- | ---: | | 2021
1 Jan

30 June | To Bank A/c (Purchase of I Machinery)
To Bank A/c (Repair on I Machinery)
To Bank A/c (Purchase of II Machinery) (3,50,000 + 15,000) | 2,00,000
50,000
3,65,000 | 2021
31 Dec | By Depreciation on:
I: 25,000
II: 18,250
By Balance c/d:
I: 2,25,000
II: 3,16,750 |

43,250

5,71,750 | | | TOTAL | 6,15,000 | | TOTAL | 6,15,000 | | 2022
1 Jan | To Balance b/d:
I: 2,25,000
II: 3,16,750 |
5,71,750 | 2022
30 June

31 Dec. | By Depreciation on 1st
By Bank A/c
By Profit & Loss A/c (Loss)
By Depreciation on II Machinery
By Balance c/d | 11,250
1,55,000
58,750
34,675
3,12,075 | | | TOTAL | 5,71,750 | | TOTAL | 5,71,750 |
Working Note: I Machine: | Date / Particulars | Amount (₹) | | :--- | ---: | | 1 Jan., 2021 | 2,50,000 | | 31 Dec. Depreciation | (25,000) | | 1 Jan., 2022 WDV | 2,25,000 | | 30 June Depreciation | (11,250) | | Book value on 30 June, 2022 | 2,13,750 | | Selling price | (1,55,000) | | Loss on sale | 58,750 |
II Machine: | Date / Particulars | Amount (₹) | | :--- | ---: | | 30 June, 2021 | 3,65,000 | | 31 Dec. Depreciation | (18,250) | | 1 Jan., 2022 WDV | 3,46,750 | | 31 Dec. Depreciation | (34,675) | | Balance on 31 Dec, 2022 | 3,12,075 |

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Depreciation

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