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a) Prepare Machi

a) Prepare Machi

FINANCIAL ACCOUNTING
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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X purchased a secondhand machinery on 1-2-2018 for Ro.50,000 paid Ro.11,000 for its overhauling and Ro.5,000 for its installation which was completed by 31-3-2018.The company provides depreciation on its machinery at 15% per annum on diminishing balance method from the date it is use and closes its books on December 31 every year. On 1-10-2019 a repair work was carried out on the machine and Ro.5,000 were paid for the same. The machine was sold on 31-10-1995 for a sum of Ro.11,000 and an amount of Ro.1000 was paid as dismantling charges. a) Prepare Machinery Account from 2018 to 2020. b) Name the method that assumes that an asset should be depreciated more in the earlier years and less in later years of use. c) Did the Machine have any salvage value?
Transcribed Image Text:X purchased a secondhand machinery on 1-2-2018 for Ro.50,000 paid Ro.11,000 for its overhauling and Ro.5,000 for its installation which was completed by 31-3-2018.The company provides depreciation on its machinery at 15% per annum on diminishing balance method from the date it is use and closes its books on December 31 every year. On 1-10-2019 a repair work was carried out on the machine and Ro.5,000 were paid for the same. The machine was sold on 31-10-1995 for a sum of Ro.11,000 and an amount of Ro.1000 was paid as dismantling charges. a) Prepare Machinery Account from 2018 to 2020. b) Name the method that assumes that an asset should be depreciated more in the earlier years and less in later years of use. c) Did the Machine have any salvage value?
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