On October 1, 2013 a machine costing Rs. 35,000 was purchased and Rs. 5,000 spent on transporting and installing it. On September 30, 2016 the above machine was discarded due to technological changes and it was sold to another firm for Rs. 15,000. A new machine was bought immediately on October 1, 2016 for Rs. 45,000. An extension was made to the new machinery on January 1, 2017 costing Rs. 10,000 which resulted in increasing its production capacity by one and half times. The firm provides depreciation @ 15% p.a. on written down value method. Prepare Machinery A/c and Provision for Depreciation A/c for the Financial Year 2016-17 assuming that the accounts are closed on March 31 every year.

On October 1, 2013 a machine costing Rs. 35,000 was purchased and Rs. 5,000 spent on transporting and installing it. On September 30, 2016 the above machine was discarded due to technological changes and it was sold to another firm for Rs. 15,000. A new machine was bought immediately on October 1, 2016 for Rs. 45,000. An extension was made to the new machinery on January 1, 2017 costing Rs. 10,000 which resulted in increasing its production capacity by one and half times. The firm provides depreciation @ 15% p.a. on written down value method. Prepare Machinery A/c and Provision for Depreciation A/c for the Financial Year 2016-17 assuming that the accounts are closed on March 31 every year.

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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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