On 1

st
January 2001, X Ltd. purchased a machine for Rs.58,000 and
spent Rs.2,000 on its erection. On 1
st
July 2001, an additional
machinery costing Rs.20,000 was purchased. On 1
st
July 2003, the
machine purchased on 1.1.2001 was sold for Rs.28,600 and on the
same date a new machine was purchased at a cost of Rs.40,000.
Depreciation was provided for annually on 31
st
December, at the
rate of 10% p.a. on the written down value of the machinery.
Prepare the Machinery Account for the first three calendar years.
Date Particulars Rs. Date Particulars Rs.
2001
Jan.1
July 1

To Bank A/c
To Bank A/c
To Bank A/c

58,000
2,000
20,000
80,000
2001
Dec.31

By Depreciation A/c
By Balance c/d

7,000
73,000

80,000
2002
Jan 1
To Balance b/d 73,000

73,000
2002
Dec.31
By Depreciation A/c
By Balance c/d
7,300
65,700
73,000
2003
Jan.1
July 1

To Balance b/d
To Bank A/c

65,700
40,000



1,05,700

2003
July 1
July 1
July 1
Dec. 31
Dec. 31


By Bank A/c
By Depreciation A/c
By P & L A/c
By Depreciation A/c
By Balance c/d

28,600
2,430
17,570
3,710
53,390
1,05,700
Solution :
Dr. Machinery A/c Cr.