On 1st Jan. 1997, Y Ltd. purchased a machinery for Rs. 15, 00,000. On 1st July...

  

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On 1st Jan. 1997, Y Ltd. purchased a machinery for Rs. 15, 00,000. On 1st July 1999, a part of the machinery purchased on 1st Jan. 1997 for Rs. 70,000 was sold for Rs. 55,000 and a new machinery at a cost of Rs. 1, 58,000 was purchased and installed on the same date. The company has adopted the method of providing 10% p.a. depreciation on the original cost of the machinery. Required: Show the necessary leader accounts assuming that (a) Provision for Depreciation Account is not maintained, (b) Provision for Depreciation Account is maintained. On 1st Jan. 1997, Y Ltd. purchased a machinery for Rs. 15, 00,000. On 1st July 1999, a part of the machinery purchased on 1st Jan. 1997 for Rs. 70,000 was sold for Rs. 55,000 and a new machinery at a cost of Rs. 1, 58,000 was purchased and installed on the same date. The company has adopted the method of providing 10% p.a. depreciation on the original cost of the machinery. Required: Show the necessary leader accounts assuming that (a) Provision for Depreciation Account is not maintained, (b) Provision for Depreciation Account is maintained.

Answer rating: 100% (QA)

a Assuming Provision for Depreciation Account is not maintained In this case we will directly charge ... View the full answer