DEPRECIATION QUESTION WITH ANSWER QUESTION NO. 37

OMTEX CLASSES



M/s Jalaram Mill, Mulund, showed a debit balance of Rs. 32,000 to the Machinery A/c on 1st April, 2001(Original cost of the Machinery was Rs. 40,000). On 1st October, 2001 the Mill bought additional Machinery for Rs. 15,000 and spent Rs. 1,000 for its installation. One more machinery costing Rs. 20,000 was purchased on 31st March, 2003. Depreciation is charged on 31st March, every year at 10% p.a. under the Diminishing Balanced Method. On 31st March, 2004, the machinery which was purchased on 1st October, 2001 was sold for Rs. 12000. Prepare Machinery A/c and Depreciation A/c for the years 2001 – 2001, 2002 – 2003 and 2003 – 2004.      (February, 2008)

Date
Machinery
Machinery 2
Machinery 3
Total depreciation
1.4.01
32000



1.10.01

16000


Depreciation @10%
3200
1800

4000
1.4.02
28800
15200


31.3.2003


20000

Depreciation @10%
2880
1520

4400
1.4.03
25920
13680
20000

Depreciation @10%
2592
1368
2000
5960
31.3.01/1.4.04

12312


Sold

12000




312
Loss


1.4.04
23328

18000


DATE
PARTICULARS
AMOUNT
DATE
PARTICULARS
AMOUNT
1.4.01
To balance b/d
Nil
31.3.02
By depreciation account
4000
1.10.01
To cash / bank account
15000



1.10.01
To cash bank account
1000






31.3.02
By balance c/d
44000


48000


48000
1.4.02
To balance b/d
44000
31.3.03
By depreciation account
4400
31.3.03
To cash / bank account
20000






31.3.03
By balance c/d
59600


64000


64000
1.4.03
To balance b/d
59600
31.3.04
By depreciation account
5960



31.3.04
By cash bank account
12000



31.3.04
By profit / loss account
312



31.3.04
By balance c/d
41328


59600


59600
1.4.04
To balance b/d
41328