On 1st January,2012 a firm purchased a machinery for Rs. 100,000. On 1st July, 2014 they also purchased additional machinery for Rs. 45,000 and spent Rs. 5,000 on its erection (Installation). Books are closed on 31st December every year. 

Prepare Machinery account for first 4 years if depreciation is charged @12% on:

 i) Reducing balance method

ii) Fixed installment method

Mian & Co. purchased on 1st January,2012 machinery for Rs. 45,000. On 1st July in the same year an additional machinery was purchased for Rs.15,000. On 1st July 2013 the machinery purchased on 1st January,2012 became obsolete and was sold for Rs.18,000.

Prepare Machinery account for three years after writing off depreciation @10 p.a on:

 i) Original cost method

ii) Diminishing balance method

Answer rating: 100% (QA)

ANSWER i Reducing balance method Year Depreciation Machinery account 2012 10000 100000 2013 8000 ... View the full answer