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DEPRECIATION ASSIGNMENT

1. On 1st January, 2008, Nitin and Co. Bombay purchased Machinery for ` 50,000.

On 1st July 2008 additional machinery purchased for ` 20,000. On 30th June 2010, the company sold a part of the first machine costing ` 10,000 on 1st January 2008 for ` 6,000. Company closes the account on 31st December, every year decided to charge 10% p.a. deprecation on original cost of the machinery. Prepare Machinery account and Depreciation account for 2008, 2009 and 2010.

2. Goodluck manufacturing Co. Ltd. Lucknow purchased new machinery for `

45,000 on 1st January, 2008 and immediately spent ` 5,000 on its fixation and erection. In the same year on 1st July additional machinery costing ` 25,000 was purchased. On 1st July 2010 the machinery purchased on 1st January, 2008 became obsolete and was sold for ` 30,000. Depreciation was provided for annually on 31st December at the rate of 10% per annum on Fixed Installment method. You are required to prepare Machinery Account for the period from 2008 to 2010. [S.L.M]

3. A company purchased a machine worth ` 2,00,000 on 1st Jan. 2008. On 1st Jan

2009, the company purchased an additional machine for ` 40,000. On 1st July 2010, the company sold the machine purchased on 1st Jan 2009 for ` 32,000. Company writes off depreciation @ 10% on the original cost and the accounts are closed every year on 31st Dec. Show the Machinery Account and Depreciation Account for the three years ending 31st Dec. 2008, 2009 and 2010 under Fixed Installment Method. [S.L.M]

4. The company purchased machinery worth ` 36,000 on 1-4-2007 and spent `

4,000 towards installation charges. The company depreciates the machinery at the rate of 10% p.a. on original cost. On 1-10-2009 the company sold out a part of machinery for ` 3,200. The original cost of the sold machinery on 1-4-2007 was ` 8,000. On 1-10-2009 the company purchased machinery for ` 10,000. The company closes the books on 31st March every year. Prepare Machinery account and the deprecation account for the years 2007-2008, 2008-2009 and 2009-2010.

5. M/s Jalaram Mill, Bodla, showed a debit balance of ` 32,000 to the Machinery A/c

on 1st April, 2001(Original cost of the Machinery was ` 40,000). On 1st October, 2001 the Mill bought additional Machinery for ` 15,000 and spent ` 1,000 for its installation. One more machinery costing ` 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 ` 12000. Prepare Machinery A/c and Depreciation A/c for the years 2001 – 2001, 2002 – 2003 and 2003 – 2004. [W.D.V.]

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6. M/s J.K. Company, Moradabad, purchased machinery for ` 80,000 on 1st April 2002. Company purchased additional machinery for ` 36,000 on 1st October, 2003. The company charges depreciation @10% p.a. on the original cost. The financial year of the Company ends on 31st March every year. On 30th September, 2004 a part of the machinery, original cost of which was ` 30,000 on 1st April, 2002 was sold by the Company for ` 22,000. Prepare Machinery account for 3 years and give journal entries for the year 2002 – 2003. [S.L.M]

7. A company purchased second-hand machinery on 1st February, 1998 for `

5,85,000 and immediately spent ` 15,000 on its erection. On 1st July, 1999, it purchased another machine for ` 4,00,000. On 30th April, 2000, it sold off the first machine for ` 2,50,000 and bough another for ` 4,20,000. On 1st August, 2001, the second machine was also sold off for Rs 3,00,000. Depreciation was provided on the machinery @15% p.a. on equal instalment method. Show the Machinery Account and Provision for Depreciation Account assuming that the books are closed on 31st December every year.

8. On 1st April, 1999, deepak Computer Services Ltd. purchased a machinery for

` 15,00,000. Depreciation is provided @ 20% p.a. on the original cost of the machinery and books are closed on 31st December each year. On 28th February, 2001, a part of this machine purchased on 1st April, 1999 for ` 3,60,000 was sold for ` 2,40,000 and on the same date new machinery was purchased for ` 4,20,000. You are required to prepare (a) Machinery Account, (b) Provision for Depreciation Account.

9. On 1st Aptil, 1999, Paridhan Silk Ltd. purchased a machinery for ` 20,00,000. It provides deprecation at 10% p.a. on the written down value method and closes its books on 31st March every year. On 1st July, 2001, a part of the machinery purchased on 1st April, 1999 for ` 4,00,000 was sold for ` 3,20,000. On 1st November, 2001, a new machinery was purchased for ` 4,80,000. You are required to prepare Machinery Account and Provision for Depreciation Account for three Years ending 31st March, 2002.

10. The following balances appear in the books of Rajdeep Ltd.:

Machinery A/c as on 01-04-2001 8,00,000 Provision for Depreciation A/c as on 01-04-2001 3,10,000 On 01-07-2001, a machinery which was purchased on 01-04-1998 for ` 1,20,000 was sold for ` 50,000 and on the same date another machinery for ` 3,20,000.The firm has been charging depreciation at 15% p.a. on original cost method and closes its books on 31st March every year. Prepare the Machinery A/c for Provision for Depreciation A/c for the year ending 31st March, 2002.

11. On 1st March, 1999, Sahil Computer Solutions Ltd. purchased a machinery for `

27,00,000. Depreciation is provided @10% p.a. on diminishing balance method and the books are closed on 31st Dec. each year. On 1st July, 2001, a part of the machinery purchased on 1st March, 1999 for ` 6,00,000 was sold for ` 3,50,000 and on the same date another machinery was purchased for ` 8,00,000. You are required to show : (i) Machinery A/c (ii) Provision for Deprecation A/c