DEPRECIATION QUESTION WITH ANSWERS


Shirish Enterprises purchased a machinery costing Rs. 36,000 on 1-4-1989 and was installed on the same date. The installation expenses amounted to Rs. 4,000. The firm decided to charge depreciation at 10% p.a. on straight line method. On 1-10-91 a part of machinery with an original price of Rs. 6,000/- (including the installation charges) was sold for Rs. 3,200 and a new machinery costing Rs. 10,000 was purchased on the same date. The firm closes its books of accounts on 31st March every year. Prepare Machinery account and Depreciation account for the year 1989-90, 1990-91 and 1991-92 in the books of the firm.

DATE
PARTICULARS
AMOUNT
DATE
PARTICULARS
AMOUNT
1.4.89
To cash/bank a/c
36000
31.3.90
By depreciation ac
4000
1.4.89
To cash/ bank ac
4000
31.3.90
By balance c/d
36000


40000


40000
1.4.90
To balance b/d
36000
31.3.91
By depreciation a/c
4000



31.3.91
By balance c/d
32000


36000


36000
1.4.91
To balance b/d
32000
1.10.91
By depreciation a/c
300
1.10.91
To cash bank a/c
10000
1.10.91
By cash bank ac
3200



1.10.91
By profit/loss ac
1300



31.3.92
By depreciation a/c
3900



31.3.92
By balance c/d
33300


42000


42000
1.4.92
To balance b/d
33300