The machinery account of a factory showed a balance of ₹95 lakhs on 1 April 2020. The books of accounts of the factory are closed as on 31st March every year and the depreciation is written off at the rate 10% per annum, under the diminishing balance method.on 1 September 2020, a new machine was acquired at a cost of ₹14 lakhs and ₹44,600 was incurred on the same day as installation charges for erecting the machine. On 1 September 2020, a machine which had a cost of ₹21,87,000 on 1 April 2018 was sold for ₹3,75,000. Another machine which had cost ₹21,85,000 on 1 April 2019 was scrapped on 1 September 2020, and it realised nothing. Prepare the plant and machinery account for the year ended 31 March 2021, allow the same rate of depreciation as in the past and calculate depreciation to the nearest multiple of a rupee. Also show the necessary working notes.
The machinery account of a factory showed a balance of ₹95 lakhs on 1 April 2020. The books of accounts of the factory are closed as on 31st March every year and the depreciation is written off at the rate 10% per annum, under the diminishing balance method.on 1 September 2020, a new machine was acquired at a cost of ₹14 lakhs and ₹44,600 was incurred on the same day as installation charges for erecting the machine. On 1 September 2020, a machine which had a cost of ₹21,87,000 on 1 April 2018 was sold for ₹3,75,000. Another machine which had cost ₹21,85,000 on 1 April 2019 was scrapped on 1 September 2020, and it realised nothing. Prepare the plant and machinery account for the year ended 31 March 2021, allow the same rate of depreciation as in the past and calculate depreciation to the nearest multiple of a rupee. Also show the necessary working notes.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The machinery account of a factory showed a balance of ₹95 lakhs on 1 April 2020. The books of accounts of the factory are closed as on 31st March every year and the depreciation is written off at the rate 10% per annum, under the diminishing balance method.on 1 September 2020, a new machine was acquired at a cost of ₹14 lakhs and ₹44,600 was incurred on the same day as installation charges for erecting the machine. On 1 September 2020, a machine which had a cost of ₹21,87,000 on 1 April 2018 was sold for ₹3,75,000. Another machine which had cost ₹21,85,000 on 1 April 2019 was scrapped on 1 September 2020, and it realised nothing.
Prepare the plant and machinery account for the year ended 31 March 2021, allow the same rate of depreciation as in the past and calculate depreciation to the nearest multiple of a rupee. Also show the necessary working notes.
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