24. On April 1, 2015, X Ltd. purchased a machinery for Rs.12.00,000. On Oct 1, 2017, a part of the machinery purchased on April 1, 2015 for Rs. 80,000 was sold for Rs. 45,000 and a new machinery at a cost of Rs.1,58,000 was purchased and installed on the same date. The company has adopted the method of k providing 10% p.a. depreciation on the original cost of the machinery. Show the necessary ledger accounts assuming that a. "Provision for Depreciation Account' is not maintained b. 'Provision for Depreciation Account' is maintained

24. On April 1, 2015, X Ltd. purchased a machinery for Rs.12.00,000. On Oct 1, 2017, a part of the machinery purchased on April 1, 2015 for Rs. 80,000 was sold for Rs. 45,000 and a new machinery at a cost of Rs.1,58,000 was purchased and installed on the same date. The company has adopted the method of k providing 10% p.a. depreciation on the original cost of the machinery. Show the necessary ledger accounts assuming that a. "Provision for Depreciation Account' is not maintained b. 'Provision for Depreciation Account' is maintained

Name: Show the Machinery Account for the year ended March 31, 2018.24. On A
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Description: Show the Machinery Account for the year ended March 31, 2018.24. On April 1, 2015, X Ltd. purchased a machinery for Rs.12,00,000. On Oct 1, 2017, a part of the machinerypurchased on April 1, 2015 for Rs. 80,000 was sold for Rs. 45,000 and a new mach

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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Question

Show the Machinery Account for the year ended March 31, 2018.
24. On April 1, 2015, X Ltd. purchased a machinery for Rs.12,00,000. On Oct 1, 2017, a part of the machinery
purchased on April 1, 2015 for Rs. 80,000 was sold for Rs. 45,000 and a new machinery at a cost of
Rs.1,58,000 was purchased and installed on the same date. The company has adopted the method of
e2k providing 10% p.a. depreciation on the original cost of the machinery.
Show the necessary ledger accounts assuming that
a. 'Provision for Depreciation Account' is not maintained
b. 'Provision for Depreciation Account' is maintained

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Reliance Limited writes off depreciation on Plant and Machinery at 10% per annum on the reducing balance method. On 1st January 2016, the plant and machinery account showed a balance of Rs. 298,000. It was discovered in 2016: a) Repairs effected on the plant on 30th June 2014 were debited to Plant and Machinery Account. The amount was Rs. 30,000. b) A Machinery costing Rs. 12,000 was entered in the purchases Book on 1st October 2014. The expenses of installation Rs. 80 were debited to General Expenses Account. Necessary corrections were made on 1st January 2016. c) During the year on 30th June, a machinery which had cost of Rs. 40,000 on 1st January 2014 was sold for Rs. 30,000 and a new machine costing Rs. 60,000 was installed on the same date, the erection expenses being Rs. 1000. Show the Plant and Machinery Account for the year 2016. Show your working in detail.
On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for $450000 when its’ carrying value in Liala Ltd book was $600000 (costs $900000, accumulated depreciation $300000). This plant has a remaining useful life of five (5) years form the date of sale. The group measures its property plants and equipment using a costs model. Tax rate is 30 percent. Required: Pass the necessary entries on 30 June 2017 and 30 June 2018 to eliminate the intra-group transfer of equipment. Show Working
On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for $450000 when its’ carrying value in Liala Ltd book was $600000 (costs $900000, accumulated depreciation $300000). This plant has a remaining useful life of five (5) years form the date of sale. The group measures its property plants and equipment using a costs model. Tax rate is 30 percent. Required: Pass the necessary entries on 30 June 2017 and 30 June 2018 to eliminate the intra-group transfer of equipment. (provide the dates)
Sanjay Industries Limited, which depreciates its machinery at 10% according to Diminishing Balance Method, had on 1st January 2016 Rs. 972,000 balance on Machinery Account. During the Year 2016 part of the machinery purchased on 1st January 2014 for Rs. 80,000 was sold for Rs. 45,000. On 1st July 2016 a new machinery at a cost of Rs. 150,000 was purchased and installed on the same date. Installation charges incurred Rs. 8,000. The company wanted to change its method depreciation from Diminishing Balance Method to Straight Line Method with effect from 1st January 2014 and adjust the difference before 31st December 2016. The rate of depreciation remains the same as before. Show Machinery Account and ascertain the amount chargeable to profit and loss account as depreciation and on sale of machinery in the year 2016.