To show the Machinery Account for the year ended 31st March 1990, we need to record the machinery transactions and calculate the depreciation. Here's the breakdown:
1. On 1-4-1989:
Machinery purchased for Rs. 80,000.
Machinery Account:
Date | Particulars | Debit | Credit
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1-4-1989 | Machinery Purchase | 80,000 |
2. On 1-4-1990:
Additions made to the tune of Rs. 40,000.
Machinery Account:
Date | Particulars | Debit | Credit
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1-4-1990 | Machinery Purchase | 40,000 |
3. On 31-3-1991:
A machinery purchased on 1-4-1989 costing Rs. 12,000 was sold for Rs. 11,000.
Machinery Account:
Date | Particulars | Debit | Credit
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31-3-1991 | Machinery Sale | | 11,000
31-3-1991 | Depreciation | | (1,200)
31-3-1991 | Accumulated Deprec. | 1,200 |
4. On 30-6-1991:
A machinery purchased on 1-4-1990 costing Rs. 32,000 was sold for Rs. 26,000.
Machinery Account:
Date | Particulars | Debit | Credit
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30-6-1991 | Machinery Sale | | 26,000
30-6-1991 | Depreciation | | (3,200)
30-6-1991 | Accumulated Deprec. | 3,200 |
5. On 1-10-1991:
Additions made to the tune of Rs. 20,000.
Machinery Account:
Date | Particulars | Debit | Credit
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1-10-1991 | Machinery Purchase | 20,000 |
Depreciation Calculation:
Depreciation is charged at 10% per annum under the diminishing balance method. Since the purchases and additions occurred at different times during the year, we need to calculate the depreciation for each period.
For the year ended 31st March 1990, the period is from 1-4-1989 to 31-3-1990, which is 365 days.
Depreciation = (Cost of Machinery - Accumulated Depreciation) * (Rate / 365) * Number of Days
Depreciation for the year ended 31st March 1990:
Depreciation = (80,000 + 40,000 - 0) * (0.10 / 365) * 365 = 12,000
After calculating the depreciation, we update the Machinery Account:
Machinery Account:
Date | Particulars | Debit | Credit
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1-4-1989 | Machinery Purchase | 80,000