MENU
Question -

On July 01, 2011 Ashwani purchased a machine for Rs 2,00,000 on credit. Installation expenses Rs 25,000 are paid by cheque. The estimated life is 5 years and its scrap value after 5 years will be Rs 20,000. Depreciation is to be charged on straight line basis. Show the journal entry for the year 2011 and prepare necessary ledger accounts for first three years.



Answer -

Books of Ashwani

Journal

Date

 

Particulars

 

L.F.

Debit Amount Rs

Credit Amount Rs

2011

 

 

 

 

 

 

Jul.01

Machinery A/c

Dr.

 

2,25,000

 

 

 

To Creditors for Machinery A/c

 

 

 

2,00,000

 

 

To Bank A/c

 

 

 

25,000

 

(Machinery bought on credit and Rs 25,000 paid

 for installation through cheque)

 

 

 

 

 

 

 

 

 

2011

 

 

 

 

 

 

Dec.31

Depreciation A/c

Dr.

 

20,500

 

 

 

To Machinery A/c

 

 

 

20,500

 

(Depreciation charged on Machinery)

 

 

 

 

 

 

 

 

 

 

2011

 

 

 

 

 

 

Dec.31

Profit and Loss A/c

Dr.

 

20,500

 

 

 

To Depreciation A/c

 

 

 

20,500

 

(Depreciation transferred to Profit and Loss Account)

 

 

 

 

 

 

 

 

 

 

 

2012

 

 

 

 

 

 

Dec.31

Depreciation A/c

Dr.

 

41,000

 

 

 

To Machinery A/c

 

 

 

41,000

 

(Depreciation charged on Machinery)

 

 

 

 

 

 

 

 

 

 

 

2012

 

 

 

 

 

 

Dec.31

Profit and Loss A/c

Dr.

 

41,000

 

 

 

To Depreciation A/c

 

 

 

41,000

 

(Depreciation transferred to Profit and Loss Account)

 

 

 

 

 

 

 

 

 

 

 

2013

 

 

 

 

 

 

Dec.31

Depreciation A/c

Dr.

 

41,000

 

 

 

To Machinery A/c

 

 

 

41,000

 

(Depreciation charged on Machinery)

 

 

 

 

2013

 

 

 

 

 

 

Dec.31 

Profit and Loss A/c

Dr.

 

41,000

 

 

 

To Depreciation A/c

 

 

 

41,000

 

(Depreciation transferred to Profit and Loss Account)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ledger

Machinery Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount 

Rs

Date

Particulars

J.F.

Amount 

Rs

2011

 

 

 

2011

 

 

 

Jul.01

Creditors for Machinery

 

2,00,000

Dec.31

Depreciation

 

20,500

Jul.01

Bank

 

25,000

Dec.31

Balance c/d

 

2,04,500

 

 

 

2,25,000

 

 

 

2,25,000

 

 

 

 

 

 

 

 

2012

 

 

 

2012

 

 

 

Jan.01

Balance b/d

 

2,04,500

Dec.31

Depreciation

 

41,000

 

 

 

 

Dec.31

Balance c/d

 

1,63,500

 

 

 

2,04,500

 

 

 

2,04,500

 

 

 

 

 

 

 

 

2013

 

 

 

2013

 

 

 

Jan.01

Balance c/d

 

1,63,500

Dec.31

Depreciation

 

41,000

 

 

 

 

Dec.31

Balance c/d

 

1,22,500

 

 

 

1,63,500

 

 

 

1,63,500

 

 

 

 

 

 

 

 

 

Working Note:

 

Calculation ofannual depreciation

 

Depreciation (p.a.)

=

(2,00,000 + 25,000 – 20,000)

5

 

=

Rs 41,000 per annum

Comment(S)

Show all Coment

Leave a Comment

Free - Previous Years Question Papers
Any questions? Ask us!
NodeJS Interview Questions Answers
ASP.Net Interview Questions Answers
Interview Questions Answers
×