Straight Line Method

Q-1: On 1.1.2010 a company purchased a machinery costing Rs.47,000 and spent Rs.5,000 on its installations. After the useful life
of 10 years its scrap value is estimatedto be Rs.2,000. Show Machinery account for first four years.
[Rs.32,000]

Q-2: Rajesh Bros. acquired a Machinery on 1.1.2010 costing Rs.18,000 and spent Rs.4,000 on its installation and Rs.1,000 on
its freight. The scrap value of the machineis estimated at Rs.2,000. The life of the machine is assumed to be 7 years and accounts are
closed on 31st December each year. You are required to show Machine Account upto 2012.
[Rs.14,000]

Q-3: Best Enterprises bought a Plant and Machinery on 1.7.2010 for Rs.22,000 which will have useful life of 5 years at the end
of which it will fetch Rs.2,000. Accountsare closed on 31st December each year. Show Plant and Machine A/c for first 3 years.
[Rs.12,000]

Q-4: Akber and Sons purchased on 1.7.2010 furniture costing Rs.19,500 and spent Rs.500 on its cartage. Depreciation is charged
at the rate of 10% p.a. by Straight LineMethod on 31st December each year. Show Furniture Account for first 3 years.
[Rs.15,000]

Q-5: Satyam Cineplex purchases a projector costing Rs.2,00,000 from a companyin USA. Custom duty of Rs.80,000 is levied
by the government and Rs.35,000 were spent on its carriage and cartage. Further Rs.25,000 were spent on its installation and
erection. The residual value of the projector is estimated to be Rs.40,000. Depreciation is charged at the rate of 10% p.a. by
straight line method. Show ProjectorA/c for first 4 years.
[Rs.2,20,000]

Q-15: On 01.01.2010, M/s ABC Ltd. purchased a second hand machinery for Rs. 17,000 and spent on its repairs and
installation Rs. 2,500 and Rs. 500 respectively. On 01.07.2010, it purchased another Machinery for Rs. 8,000. On 30.09.2012 it
sold the first Machinery for Rs. 17,800 and purchased a new machinery for Rs. 30,000 on the same day.
Depreciation is charged on machine at the rate of 5% p.a. by fixed instalment methodon December 31st every year. You are
required to show Machinery A/c for 3 years.
[Profit on sale: Rs.550; Balance: Rs.36,625]

Q-16: On 01.01.2010, M/s Sunder Ltd. purchased a second hand machinery for Rs. 51,000 and spent on its repairs and
installation Rs. 7,500 and Rs. 1,500 respectively. On 01.07.2010, it purchased another Machinery for Rs. 24,000. On 30.09.2012 it
soldthe first Machinery for Rs. 53,400 and purchased a new machinery for Rs. 90,000 on the same day.
Depreciation is charged on machine at the rate of 5% p.a. by fixed instalment methodon December 31st every year. You are required to
show Machinery A/c for 3 years.
[Profit on sale: Rs.1,650; Balance: Rs.1,09,875]

-+Diminishing Balance Method

Q-19: On 1.1.2010 a company purchased a machinery costing Rs. 47,500 and spent Rs. 2,500 on its installations. After the useful life its
scrap value is estimated to be Rs. 2000. Depreciation is charged under Diminishing Balance Method @ 10% p.a. Show Machinery
account for first 3 years.
[Rs. 36,450

Q-22: Amar and Sons purchased on 1.7.2010 furniture costing Rs. 29,500 and spent Rs. 500 on its cartage. Depreciation is
charged at the rate of 20% p.a. by written down method on 31st December each year. Show Furniture Account for first 3 years.
[Rs. 17,280]

Q-23: PVR Multiplex purchases a projector costing Rs. 2,00,000 from a company inJapan. Custom duty of Rs. 55,000 is levied
by the government and Rs. 30,000 were spent on its carriage and cartage. Further Rs. 15,000 were spent on its installationand
erection. The residual value of the projector is estimated to be Rs.25,[Link] is charged at the rate of 12.5% p.a. by
reducing installment method. Show Projector A/c for first three years.
[Rs. 2,00,977]

Q-24: On 01.01.2010 Manmohan & Co. bought a machine costing Rs. 20,000 andspent Rs. 5,000 on its installation. On
01.07.2011 it purchases another machine costing Rs. 15,000 having scrap value of Rs. 3,000. On 31.03.2012 it purchased third
machine for Rs. 8,000 and spent Rs. 2,000 on its erection, having residual value of Rs. 500. Allthe machines are subject to
depreciation @ 10% p.a. under diminishing balance method on 31st December each year.
Show Machinery account for the years upto 2012.
[Rs. 40,300 (1st- 18,225; 2nd- 12,825; 3rd- 9,250)]
Q-27: On 01.07.2010 Kamal bought a machine costing Rs. 19,000 and spent Rs.5,000on its erection, estimated to realize Rs. 4,000 after
its useful life. On 01.10.2010 hepurchases another machine costing Rs. 40,000 having scrap value of Rs. 3,000. On01.01.2012 it
purchased third machine for Rs. 20,500 and spent Rs. 3,500 on its erection. All the machines are subject to 10% depreciation under
reducing balancemethod on 30th June each year. Show Machinery account for the years upto 30th June 2013.
[Rs. 67,986 (1st- 17,496; 2nd- 29,970; 3rd- 20,520)]

Q-28: Raju purchased on 01.07.2010, a machine costing Rs. 17,000 and spent Rs. 3,000 on its installation and erection. He purchased
another machine on 01.04.2011 for Rs. 30,000. On 30.06.2012 he sold the first machine for Rs. 14,500. Depreciationis charged on
machine at the rate of 10% p.a. by written down value method on December 31st every year. You are required to show Machinery
A/c upto 2013.
[Loss on sale: Rs.1,745; Balance: Rs.22,477]

Q-31: On 1st May 2010, Sangeeta purchased a machinery costing Rs. 92,800 andspent Rs. 27,200 on its installation and will
have a scrap value of Rs. 9,000 . She purchased another machine on 30th September 2010 for Rs. 40,000. On 1st January2012
she sold the first machine for Rs. 73,000 and bought a new machinery for Rs. 50,000. Depreciation is charged on machine at
the rate of 20% p.a. by reducing instalment method on December 31st every year. You are required to show Machinery A/c for 3
years.
[Loss on sale: Rs.10,200; Balance: Rs.64,320]

Q-32: On 01.01.2010, M/s XYZ Ltd. purchased a second hand machinery for Rs. 17,000 and spent on its repairs and
installation Rs. 2,500 and Rs. 500 respectively. On 01.07.2010, it purchased another Machinery for Rs. 8,000. On 30.09.2012 it
sold the first Machinery for Rs. 18,000 and purchased a new machinery for Rs. 30,000 on the same day.
Depreciation is charged on machine at the rate of 5% p.a. by diminishing balance method on December 31st every year. You
are required to show Machinery A/c for 3years.
[Profit on sale: Rs.627; Balance: Rs.36,664]

Q-33: On 01.01.2010, M/s Best Ltd. purchased a second hand machinery for Rs. 51,000 and spent on its repairs and
installation Rs. 7,500 and Rs. 1,500 respectively. On 01.07.2010, it purchased another Machinery for Rs. 24,000. On 30.09.2012 it
soldthe first Machinery for Rs. 54,000 and purchased a new machinery for Rs. 90,000 on the same day.
Depreciation is charged on machine at the rate of 5% p.a. by diminishing balance method on December 31st every year. You
are required to show Machinery A/c for 3years.
[Profit on sale: Rs.1,881; Balance: Rs.1,09,992]

Sale of a Part (Diminishing Balance Method)

Q-36: A company bought a machinery for Rs. 1,00,000 including a boiler worth Rs. 20,000. The Machinery Account had been credited
at the rate of 10% p.a. each year by diminishing balance method. At the beginning of the 4th year, the boiler become useless and sold
for Rs. 10,000. Show Machinery Account for four years.
[Loss on sale: Rs.4,580; Balance: Rs.52,488]

Q-37: A company bought a machinery for Rs. 3,00,000 including a generator worth Rs. 60,000. The Machinery Account had been
credited at the rate of 10% p.a. each year by diminishing balance method. At the beginning of the 4th year, the generator become
useless and sold for Rs. 30,000. Show Machinery Account for four years.
[Loss on sale: Rs.13,740; Balance: Rs.1,57,464]

Q-38: Nakul bought a machine costing Rs. 56,000 on 01.01.2010 and spent Rs. 1,000on its freight and Rs. 3,000 on its installation. On
31.03.2012, 1/3 of the machine become useless and disposed off for Rs. 13,[Link] is charged at the rate of 10% p.a. by
reducing instalment method on 31st December each year. Show Plant and Machinery Account upto 2013.
[Loss on sale: Rs.2,295; Balance: Rs.26,244]

Sale of a Part (Straight Line Method)

Q-42: On 01.01.2010 Amit bought a machine costing Rs. 26,000 and spent Rs. 500on its freight and Rs. 3,500 on its
installation. On 31.03.2012, 1/3 of the machine become useless and disposed off for Rs. 6700.
Depreciation is charged at the rate of 10% p.a. by Straight line method on 31st December each year. Show Plant and Machinery
Account upto 2013.
[Loss on sale: Rs.1,050; Balance: Rs.12,000]

Q-43: On 01.01.2010 Atal purchased a machine costing Rs. 93,000 and spent Rs. 1,500 on its freight and Rs. 5,500 on its
installation. On 30.06.2012, 1/4 of the machinebecome useless and disposed off for Rs.16,000.
Depreciation is charged at the rate of 10% p.a. by Straight line method on 31st December each year. Show Plant and Machinery
Account upto 2013.
 [Loss on sale: Rs.2,750; Balance: Rs.45,000]

Q-44: On 01.01.2010 Ram bought a machine costing Rs. 50,000. On 01.07.2012, a part of the machine become useless and
disposed off for Rs.13,000; its original cost was Rs. 20,000 on 01.01.2010.
Depreciation is charged at the rate of 15% p.a. by Straight line method on 31st December each year. Show Plant and
Machinery Account upto 2012.
[Profit on sale: Rs.500; Balance: Rs.16,500]