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Question -

Shri Krishan Manufacturing Company purchased 10 machines for Rs 75,000 each on July 01, 2014. On October 01, 2016, one of the machines got destroyed by fire and an insurance claim of Rs 45,000 was admitted by the company. On the same date another machine is purchased by the company for Rs 1,25,000.

The company writes off 15% p.a. depreciation on written down value basis. The company maintains the calendar year as its financial year. Prepare the machinery account from 2014 to 2017.



Answer -

Books of Shri Krishna Manufacturing Company

Machinery Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount

Rs

Date

Particulars

J.F.

Amount

Rs

2014

 

 

 

2014

 

 

 

Jul.01

Bank

 

7,50,000

Dec.31

Depreciation

 

56,250

 

 

 

 

Dec.31

Balance c/d

 

6,93,750

 

 

 

 

 

 

 

 

 

 

 

7,50,000

 

 

 

7,50,000

 

 

 

 

 

 

 

 

2015

 

 

 

2015

 

 

 

Jan.01

Balance b/d

 

6,93,750

Dec.31

Depreciation

 

1,04,063

 

 

 

 

Dec.31

Balance c/d

 

5,89,687

 

 

 

6,93,750

 

 

 

6,93,750

 

 

 

 

 

 

 

 

2016

 

 

 

2016

 

 

 

Jan.01

Balance b/d

 

5,89,687

Oct.01

Depreciation (9 months

 

6,634

 

 

 

 

 

for one machine)

 

 

Oct.01

Bank

 

1,25,000

Oct.01

Insurance Co.

 

45,000

 

 

 

 

Oct.01

Profit and Loss (Loss)

 

7,335

 

 

 

 

Dec.31

Depreciation

 

 

 

 

 

 

 

(i) 79,608, (ii) 4,688

 

84,296

 

 

 

 

Dec.31

Balance c/d

 

 

 

 

 

 

 

(i) 4,51,110, (ii) 1,20,312

 

5,71,422

 

 

 

7,14,687

 

 

 

7,14,687

 

 

 

 

 

 

 

 

2017

 

 

 

2017

 

 

 

Jan.01

Balance b/d

 

 

Dec.31

Depreciation

 

 

 

(i) 4,51,110, (ii) 1,20,312

 

5,71,422

 

(i) 67,667, (ii) 18,047

 

85,714

 

 

 

 

Dec.31

Balance c/d

 

 

 

 

 

 

 

(i) 3,83,443, (ii) 1,02,265

 

4,85,708

 

 

 

 

 

 

 

 

 

 

 

5,71,422

 

 

 

5,71,422

 

 

 

 

 

 

 

 

 

Working Note:

 

Machine Costing Rs75,000 sold on Oct.01, 2002

 

Opening Balance

–

Depreciation

=

Closing Balance

Jul.01, 2014

75,000

–

5,625

(6 months)

=

69,375

Jan.01, 2015

69,375

–

10,406

=

58,969

Jan.01, 2016

58,969

–

6,634

(9 months)

=

52,335

 

Value on Oct.01, 2016

 

52,335

Insurance Claim

 

– 45,000

Loss

 

Rs 7,335

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