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 31^st 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