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Question -

Ganga Ltd. purchased a machinery on January 01, 2014 for Rs 5,50,000 and spent Rs 50,000 on its installation. On September 01, 2014 it purchased another machine for Rs 3,70,000. On May 01, 2015 it purchased another machine for Rs 8,40,000 (including installation expenses).
Depreciation was provided on machinery @10% p.a. on original cost method annually on December 31. Prepare:
(a) Machinery account and depreciation account for the years 2014, 2015, 2016 and 2017.
(b) If depreciation is accumulated in provision for Depreciation account then prepare machine account and provision for depreciation account for the years 2014, 2015, 2016 and 2017.




Answer -

 (a)

Books of Ganga Ltd.
Machinery Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount

Rs

Date

Particulars

J.F.

Amount

Rs

2014

 

 

 

2014

 

 

 

Jan.01

Bank (i)

 

6,00,000

Dec.31

Depreciation

(i) 60,000 (ii) 12,333 

 

72,333

 

(5,50,000 + 50,000)

 

 

Dec.31

Balance c/d

 

 

Sep.01

Bank (ii)

 

3,70,000

 

(i) 5,40,000, (ii) 3,57,667 

 

8,97,667

 

 

 

9,70,000

 

 

 

9,70,000

 

 

 

 

 

 

 

 

2015

 

 

 

2015

 

 

 

Jan.01

Balance b/d

 

 

Dec.31

Depreciation

 

 

 

(i) 5,40,000, (ii) 3,57,667

 

8,97,667

 

(i) 60,000, (ii) 37,000,

 

 

May.01

Bank (iii)

 

8,40,000

 

(iii) 56,000

 

1,53,000

 

 

 

 

Dec.31

Balance c/d

 

 

 

 

 

 

 

(i) 4,80,000 (ii) 3,20,667,

 

 

 

 

 

 

 

(iii) 7,84,000

 

15,84,667

 

 

 

17,37,667

 

 

 

17,37,667

 

 

 

 

 

 

 

 

2016

 

 

 

2016

 

 

 

Jan.01

Balance b/d

 

 

Dec.31

Depreciation

 

 

 

(i) 4,80,000, (ii) 3,20,667

 

 

 

(i) 60,000, (ii) 37,000,

 

 

 

(iii) 7,84,000

 

15,84,667

Dec.31

(iii) 84,000

 

1,81,000

 

 

 

 

 

Balance c/d

 

 

 

 

 

 

 

(i) 4,20,000, (ii) 2,83,667,

 

 

 

 

 

 

 

(iii) 7,00,000

 

14,03,667

 

 

 

15,84,667

 

 

 

15,84,667

 

 

 

 

 

 

 

 

2017

 

 

 

2017

 

 

 

Jan.01

Balance b/d

 

 

Dec.31

Depreciation

 

 

 

(i) 4,20,000, (ii) 2,83,667,

 

 

 

(i) 60,000, (ii) 37,000,

 

 

 

(iii) 7,00,000

 

14,03,667

 

(iii) 84,000

 

1,81,000

 

 

 

 

Dec.31

Balance c/d

 

 

 

 

 

 

 

(i) 3,60,000, (ii) 2,46,667,

 

 

 

 

 

 

 

(iii) 6,16,000

 

12,22,667

 

 

 

14,03,667

 

 

 

14,03,667

 

 

 

 

 

 

 

 

 

Depreciation Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount Rs

Date

Particulars

J.F.

Amount Rs

2014

 

 

 

2014

 

 

 

Dec.31

Machinery

 

72,333

Dec.31

Profit and Loss

 

72,333

 

 

 

72,333

 

 

 

72,333

 

 

 

 

 

 

 

 

2015

 

 

 

2015

 

 

 

Dec.31

Machinery

 

1,53,000

Dec.31

Profit and Loss

 

1,53,000

 

 

 

1,53,000

 

 

 

1,53,000

 

 

 

 

 

 

 

 

2016

 

 

 

2016

 

 

 

Dec.31

Machinery

 

1,81,000

Dec.31

Profit and Loss

 

1,81,000

 

 

 

1,81,000

 

 

 

1,81,000

 

 

 

 

 

 

 

 

2017

 

 

 

2017

 

 

 

Dec.31

Machinery

 

1,81,000

Dec.31

Profit and Loss

 

1,81,000

 

 

 

1,81,000

 

 

 

1,81,000

 

 

 

 

 

 

 

 

 

(b)

Machinery Account 

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount

Rs

Date

Particulars

J.F.

Amount

Rs

2014

 

 

 

2014

 

 

 

Jan.01

Bank (i)

 

6,00,000

 

 

 

 

 

(5,50,000 + 50,000)

 

 

Dec.31

Balance c/d

 

 

Sep.01

Bank (ii)

 

3,70,000

 

 

 

9,70,000

 

 

 

9,70,000

 

 

 

9,70,000

 

 

 

 

 

 

 

 

2015

 

 

 

2015

 

 

 

Jan.01

Balance b/d

 

 

 

 

 

 

 

(i) 6,00,000 (ii) 3,70,000

 

9,70,000

 

 

 

 

May.01

Bank (iii)

 

8,40,000

Dec.31

Balance c/d

 

18,10,000

 

 

 

18,10,000

 

 

 

18,10,000

 

 

 

 

 

 

 

 

2016

 

 

 

2016

 

 

 

Jan.01

Balance b/d

 

 

Dec.31

Balance c/d

 

18,10,000

 

(i) 6,00,000 (ii) 3,70,000

 

 

 

 

 

 

 

(iii) 8,40,000

 

18,10,000

 

 

 

 

 

 

 

18,10,000

 

 

 

18,10,000

 

 

 

 

 

 

 

 

2017

 

 

 

2017

 

 

 

Jan.01

Balance b/d

 

 

Dec.31

Balance c/d

 

18,10,000

 

(i) 6,00,000 (ii) 3,70,000

 

 

 

 

 

 

 

(iii) 8,40,000

 

18,10,000

 

 

 

 

 

 

 

18,10,000

 

 

 

18,10,000

 

 

 

 

 

 

 

 

 

Provision for Depreciation  Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount

 Rs

Date

Particulars

J.F.

Amount 

Rs

2014

 

 

 

2014

 

 

 

Dec.31

Balance c/d

 

72,333

Dec.31

Depreciation

 

72,333

 

 

 

 

 

 

 

 

 

 

 

72,333

 

 

 

72,333

 

 

 

 

 

 

 

 

 

 

 

 

2015

 

 

 

2015

 

 

 

Jan.01

Balance b/d

 

72,333

Dec.31

Balance c/d

 

2,25,333

Dec.31

Depreciation

 

1,53,000

 

 

 

2,25,333

 

 

 

2,25,333

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

 

 

2016

 

 

 

Jan.01

Balance b/d

 

2,25,333

Dec.31

Balance c/d

 

4,06,333

Dec.31

Depreciation

 

1,81,000

 

 

 

4,06,333

 

 

 

4,06,333

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

 

 

2017

 

 

 

Jan.01

Balance b/d

 

4,06,333

Dec.31

Balance c/d

 

5,87,333

Dec.31

Depreciation

 

1,81,000

 

 

 

5,87,333

 

 

 

5,87,333

 

 

 

 

 

 

 

 

 

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