A company purchased second hand machinery on 1st January, 2012 for $ 3,00,000, subsequent to which $ 60,000 and $ 40,000 were spent on its repairs and installation, respectively. On 1sª July, 2013 another machinery was purchased for $ 2,60,000. On 1* July, 2014, the first machinery having become outdated was auctioned for. $ 3,00,000 and on the same date, another machinery was purchased for $ 2,50,000. On 1s* July, 2015, the second machinery was also sold off and it fetched $ 2,30,000. Depreciation was provided on machinery @ 10% on the original cost annually on 31st December, the Fixed Instalment method. From 1st January, 2014, the method of providing depreciation was to Reducing Balance method from the date of asset coming into use, the rate being 15% p.a. You are required to prepare the following accounts in the books of the company :

A company purchased second hand machinery on 1st January, 2012 for $ 3,00,000, subsequent to which $ 60,000 and $ 40,000 were spent on its repairs and installation, respectively. On 1sª July, 2013 another machinery was purchased for $ 2,60,000. On 1* July, 2014, the first machinery having become outdated was auctioned for. $ 3,00,000 and on the same date, another machinery was purchased for $ 2,50,000. On 1s* July, 2015, the second machinery was also sold off and it fetched $ 2,30,000. Depreciation was provided on machinery @ 10% on the original cost annually on 31st December, the Fixed Instalment method. From 1st January, 2014, the method of providing depreciation was to Reducing Balance method from the date of asset coming into use, the rate being 15% p.a. You are required to prepare the following accounts in the books of the company :

Name: A company purchased second hand machinery on 1st January, 2012 for $
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Description: A company purchased second hand machinery on 1st January, 2012 for $ 3,00,000, subsequent towhich $ 60,000 and $ 40,000 were spent on its repairs and installation, respectively. On 1st July, 2013another machinery was purchased for $ 2,60,000. On 1st

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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