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Question -

On April 01, 2010, Bajrang Marbles purchased a Machine for Rs 1,80,000 and spent Rs 10,000 on its carriage and Rs 10,000 on its installation. It is estimated that its working life is 10 years and after 10 years its scrap value will be Rs 20,000.
 
(a) Prepare Machine account and Depreciation account for the first four years by providing depreciation on straight line method. Accounts are closed on March 31st every year.
(b) Prepare Machine account, Depreciation account and Provision for depreciation account (or accumulated depreciation account) for the first four years by providing depreciation using straight line method accounts are closed on March 31 every year.



Answer -

 (a)

Books of Bajrang Marbles

 

Machinery Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount

(₹)

Date

Particulars

J.F.

Amount

(₹)

2010

 

 

 

2011

 

 

 

Apr.01

Bank

 

2,00,000

Mar.31

Depreciation

 

18,000

 

(1,80,0000 + 20,000)

 

 

 

Balance c/d

 

1,82,000

 

 

 

2,00,000

 

 

 

2,00,000

 

 

 

 

 

 

 

 

2011

 

 

 

2012

 

 

 

Apr.01

Balance b/d

 

1,82,000

Mar.31

Depreciation

 

18,000

 

 

 

 

Mar.31

Balance c/d

 

1,64,000

 

 

 

1,82,000

 

 

 

1,82,000

 

 

 

 

 

 

 

 

2012

 

 

 

2013

 

 

 

Apr.01

Balance b/d

 

1,64,000

Mar.31

Depreciation

 

18,000

 

 

 

 

Mar.31

Balance c/d

 

1,46,000

 

 

 

1,64,000

 

 

 

1,64,000

 

 

 

 

 

 

 

 

2013

 

 

 

2014

 

 

 

Apr.01

Balance b/d

 

1,46,000

Mar.31

Depreciation

 

18,000

 

 

 

 

Mar.31

Balance c/d

 

1,28,000

 

 

 

1,46,000

 

 

 

1,46,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Working notes: Calculation ofannual depreciation

 

Depreciation (p.a.)

=

(Original cost – Scrap Value )

 

 

Estimated Life of Asset (years)

 

 

 

=

(1,80,000 + 10,000 + 10,000 – 20,000)

 

10

 

=

₹ 18,000 per annum

 

Depreciation Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount

(₹)

Date

Particulars

J.F.

Amount

(₹)

2011

 

 

 

2011

 

 

 

Mar.31

Machinery

 

18,000

Mar.31

Profit and Loss

 

18,000

 

 

 

 

 

 

 

 

 

 

 

18,000

 

 

 

18,000

 

 

 

 

 

 

 

 

2012

 

 

 

2012

 

 

 

Mar.31

Machinery

 

18,000

Mar.31

Profit and Loss

 

18,000

 

 

 

 

 

 

 

 

 

 

 

18,000

 

 

 

18,000

 

 

 

 

 

 

 

 

2013

 

 

 

2013

 

 

 

Mar.31

Machinery

 

18,000

Mar.31

Profit and Loss

 

18,000

 

 

 

 

 

 

 

 

 

 

 

18,000

 

 

 

18,000

 

 

 

 

 

 

 

 

2014

 

 

 

2014

 

 

 

Mar.31

Machinery

 

18,000

Mar.31

Profit and Loss

 

18,000

 

 

 

 

 

 

 

 

 

 

 

18,000

 

 

 

18,000

 

 

 

 

 

 

 

 

 

(b)

Machinery Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount 

(₹)

Date

Particulars

J.F.

Amount

(₹)

2010

 

 

 

2011

 

 

 

Apr.01

Bank

 

2,00,000

Mar.31

Balance c/d

 

2,00,000

 

 

 

 

 

 

 

 

 

 

 

2,00,000

 

 

 

2,00,000

 

 

 

 

 

 

 

 

2011

 

 

 

2012

 

 

 

Apr.01

Balance b/d

 

2,00,000

Mar.31

Balance c/d

 

2,00,000

 

 

 

 

 

 

 

 

 

 

 

2,00,000

 

 

 

2,00,000

 

 

 

 

 

 

 

 

2012

 

 

 

2013

 

 

 

Apr.01

Balance b/d

 

2,00,000

Mar.31

Balance c/d

 

2,00,000

 

 

 

 

 

 

 

 

 

 

 

2,00,000

 

 

 

2,00,000

 

 

 

 

 

 

 

 

2013

 

 

 

2014

 

 

 

Apr.01

Balance b/d

 

2,00,000

Mar.31

Balance c/d

 

2,00,000

 

 

 

 

 

 

 

 

 

 

 

2,00,000

 

 

 

2,00,000

 

 

 

 

 

 

 

 

 

Provision for Depreciation Account

 

Dr.

 

 

 

 

 

 

Cr.

 

Date

Particulars

J.F.

Amount

(₹)

Date

Particulars

J.F.

Amount

(₹)

2011

 

 

 

2011

 

 

 

Mar.31

Balance c/d

 

18,000

Mar.31

Depreciation

 

18,000

 

 

 

 

 

 

 

 

 

 

 

18,000

 

 

 

18,000

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

 

 

 

 

 

 

Apr.01

Balance b/d

 

18,000

 2012

 

 

 

2012

 

 

 

 Mar.31

Balance c/d

 

 36,000

Mar.31

Depreciation

 

18,000

 

 

 

36,000

 

 

 

36,000

 

 

 

 

 

 

 

 

 

 

 

 

2012

 

 

 

 

 

 

 

Apr.01

Balance b/d

 

36,000

 2013

 

 

 

2013

 

 

 

 Mar.31

Balance c/d 

 

 54,000

Mar.31

Depreciation

 

18,000

 

 

 

54,000

 

 

 

54,000

 

 

 

 

 

 

 

 

 

 

 

 

2003

 

 

 

 

 

 

 

Apr.01

Balance b/d

 

54,000

 2014

 

 

 

2014

 

 

 

 Mar.31

Balance c/d

 

 72,000

Mar.31

Depreciation

 

18,000

 

 

 

72,000

 

 

 

72,000

 

 

 

 

 

 

 

 

 

Depreciation Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount

Rs

Date

Particulars

J.F.

Amount

Rs

2011

 

 

 

2011

 

 

 

Mar.31

Provision for Depreciation

 

18,000

Mar.31

Profit and Loss

 

18,000

 

 

 

 

 

 

 

 

 

 

 

18,000

 

 

 

18,000

 

 

 

 

 

 

 

 

2012

 

 

 

2012

 

 

 

Mar.31

Provision for Depreciation

 

18,000

Mar.31

Profit and Loss

 

18,000

 

 

 

 

 

 

 

 

 

 

 

18,000

 

 

 

18,000

 

 

 

 

 

 

 

 

2013

 

 

 

2013

 

 

 

Mar.31

Provision for Depreciation

 

18,000

Mar.31

Profit and Loss

 

18,000

 

 

 

 

 

 

 

 

 

 

 

18,000

 

 

 

18,000

 

 

 

 

 

 

 

 

2014

 

 

 

2014

 

 

 

Mar.31

Provision for Depreciation

 

18,000

Mar.31

Profit and Loss

 

18,000

 

 

 

 

 

 

 

 

 

 

 

18,000

 

 

 

18,000

 

 

 

 

 

 

 

 


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