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.
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
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