On 1st April 2015 Suman Traders purchased machinery for ₹30,000. On 1st Oct 2015, they purchased further Machinery costing ₹20,000. On 1st Oct 2016 they sold the Machine purchased on 1st April 2015 for ₹18,000 and brought another Machine for ₹15,000 on the same date. Depreciation is provided on Machinery @20% p.a. on the Diminishing balance Method and financial year closing on 31st March every year. Prepare the Machinery Account and Depreciation account for the year 2015-16, 2016-17 and 2017-18. Prepare the Machinery Account and Depreciation account for the year 2015-16, 2016-17 and 2017-18.

5. On 1st April 2015 Suman Traders purchased machinery for ₹30,000. On 1st Oct 2015, they purchased further Machinery costing ₹20,000.

On 1st Oct 2016 they sold the Machine purchased on 1st April 2015 for ₹18,000 and brought another Machine for ₹15,000 on the same date.

Depreciation is provided on Machinery @20% p.a. on the Diminishing balance Method and financial year closing on 31st March every year.

Prepare the Machinery Account and Depreciation account for the year 2015-16, 2016-17 and 2017-18.

Solution:  

In the Books of Suman Traders 

Machinery Account

Date	Particulars	JF	Amount	Date	Particulars	JF	Amount
2015				2016
1st April	To cash/bank A/c		30,000	31st March	By Depreciation A/c		8,000
1st Oct	To cash/bank A/c		20,000
				31st March	By Balance c/d		42,000
			50,000				50,000
2016				2016
1st April	To Balane b/d		42,000	1st Oct	By Depreciation A/c		2,400

1st Oct

To Cash/Bank A/c

15,000

1st Oct

By Cash/Bank A/c

18,000

				1st Oct	By Loss on Sale of Machinery		3,600
				2017
				31st March	By Depreciation A/c		5,100
				31st March	By Balance c/d		27,900
			57,000				57,000
2017				2017
1st April	To Balance b/d		27,900	31st March	By Depreciation A/c		5,580
				31st March	By Balance c/d		22,320
			27,900				27,900
2018
1st April	To Balance c/d		22,320

Depreciation Account

Date	Particulars	JF	Amount	Date	Particulars	JF	Amount
2016				2016
31st March	To machinery A/c		8,000	31st March	By Profit & Loss A/c		10,400
1st Oct	To machinery A/c		2,400
			10,400				10,400
2017				2017
31st march	To machinery A/c		5,100	31st March	By Profit & Loss A/c		5,100
			5,100				5,100
2018				2018
31st March	To machinery A/c		5,580	31st march	By Profit & Loss A/c		5,580
			5,580				5,580

Calculation & Explanation:

1. 31st march 2016

(M1) 30,000*20% = 6,000

(M2) 20,000*20%*6/12 = 2,000

2. 1st Oct 2016

(M1) 24,000*20%*6/12 = 2,400

31st March 2017

(M2) 18,000*20% = 3,00

(M3) 15,000*20%*6/12 = 1,500

3.31st March 2018

(M2) 14,400*20% = 2,880

(M3) 13,500*20% = 2,700 

Depreciation Calculator along with month and percentage