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DEPRECIATION ASSIGNMENT

1. On 1st January, 2008, Nitin and Co. Bombay purchased Machinery for ` 50,000.
On 1 st July 2008 additional machinery purchased for ` 20,000. On 30th June 2010,
the company sold a part of the first machine costing ` 10,000 on 1st January
2008 for ` 6,000. Company closes the account on 31 st December, every year
decided to charge 10% p.a. deprecation on original cost of the machinery.
Prepare Machinery account and Depreciation account for 2008, 2009 and 2010.

2. Goodluck manufacturing Co. Ltd. Lucknow purchased new machinery for `

st
45,000 on 1 January, 2008 and immediately spent ` 5,000 on its fixation and
erection. In the same year on 1 st July additional machinery costing ` 25,000 was
purchased. On 1st July 2010 the machinery purchased on 1st January, 2008
became obsolete and was sold for ` 30,000. Depreciation was provided for
annually on 31st December at the rate of 10% per annum on Fixed Installment
method. You are required to prepare Machinery Account for the period from
2008 to 2010. [S.L.M]

3. A company purchased a machine worth ` 2,00,000 on 1st Jan. 2008. On 1st Jan
2009, the company purchased an additional machine for ` 40,000. On 1st July
2010, the company sold the machine purchased on 1st Jan 2009 for ` 32,000.
Company writes off depreciation @ 10% on the original cost and the accounts
are closed every year on 31st Dec. Show the Machinery Account and
Depreciation Account for the three years ending 31st Dec. 2008, 2009 and
2010 under Fixed Installment Method. [S.L.M]

4. The company purchased machinery worth ` 36,000 on 1-4-2007 and spent `

4,000 towards installation charges. The company depreciates the machinery at
the rate of 10% p.a. on original cost. On 1-10-2009 the company sold out a part
of machinery for ` 3,200. The original cost of the sold machinery on 1-4-2007
was ` 8,000. On 1-10-2009 the company purchased machinery for ` 10,000.
st
The company closes the books on 31 March every year. Prepare Machinery
account and the deprecation account for the years 2007-2008, 2008-2009 and
2009-2010.

5. M/s Jalaram Mill, Bodla, showed a debit balance of ` 32,000 to the Machinery A/c
on 1 s t April, 2001(Original cost of the Machinery was ` 40,000). On 1 s t October,
2001 the Mill bought additional Machinery for ` 15,000 and spent ` 1,000 for its
installation. One more machinery costing ` 20,000 was purchased on 31s t March,
2003. Depreciation is charged on 31 st March, every year at 10% p.a. under the
Diminishing Balanced Method. On 31st March, 2004, the machinery which was
purchased on 1 st October, 2001 was sold for ` 12000. Prepare Machinery A/c and
Depreciation A/c for the years 2001 – 2001, 2002 – 2003 and 2003 – 2004.
[W.D.V.]

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6. M/s J.K. Company, Moradabad, purchased machinery for ` 80,000 on 1 st April
2002. Company purchased additional machinery for ` 36,000 on 1 st October,
2003. The company charges depreciation @10% p.a. on the original cost.
The financial year of the Company ends on 31 st March every year. On 30 th
September, 2004 a part of the machinery, original cost of which was `
30,000 on 1 st April, 2002 was sold by the Company for ` 22,000. Prepare
Machinery account for 3 years and give journal entries for the year 2002 –
2003. [S.L.M]

7. A company purchased second-hand machinery on 1st February, 1998 for `

5,85,000 and immediately spent ` 15,000 on its erection. On 1st July, 1999, it
purchased another machine for ` 4,00,000. On 30th April, 2000, it sold off the
first machine for ` 2,50,000 and bough another for ` 4,20,000. On 1st August,
2001, the second machine was also sold off for Rs 3,00,000. Depreciation
was provided on the machinery @15% p.a. on equal instalment method.
Show the Machinery Account and Provision for Depreciation Account assuming
that the books are closed on 31st December every year.

8. On 1st April, 1999, deepak Computer Services Ltd. purchased a machinery for
` 15,00,000. Depreciation is provided @ 20% p.a. on the original cost of the
machinery and books are closed on 31st December each year. On 28th
February, 2001, a part of this machine purchased on 1st April, 1999 for `
3,60,000 was sold for ` 2,40,000 and on the same date new machinery was
purchased for ` 4,20,000. You are required to prepare (a) Machinery Account,
(b) Provision for Depreciation Account.

9. On 1st Aptil, 1999, Paridhan Silk Ltd. purchased a machinery for ` 20,00,000.
It provides deprecation at 10% p.a. on the written down value method and
closes its books on 31st March every year. On 1st July, 2001, a part of the
machinery purchased on 1st April, 1999 for ` 4,00,000 was sold for ` 3,20,000.
On 1st November, 2001, a new machinery was purchased for ` 4,80,000. You
are required to prepare Machinery Account and Provision for Depreciation
Account for three Years ending 31st March, 2002.

10. The following balances appear in the books of Rajdeep Ltd.:

Machinery A/c as on 01-04-2001 8,00,000
Provision for Depreciation A/c as on 01-04-2001 3,10,000
On 01-07-2001, a machinery which was purchased on 01-04-1998 for `
1,20,000 was sold for ` 50,000 and on the same date another machinery for
` 3,20,000.The firm has been charging depreciation at 15% p.a. on original
cost method and closes its books on 31st March every year. Prepare the
Machinery A/c for Provision for Depreciation A/c for the year ending 31st
March, 2002.

11. On 1st March, 1999, Sahil Computer Solutions Ltd. purchased a machinery for `
27,00,000. Depreciation is provided @10% p.a. on diminishing balance method
and the books are closed on 31st Dec. each year. On 1st July, 2001, a part of
the machinery purchased on 1st March, 1999 for ` 6,00,000 was sold for `
3,50,000 and on the same date another machinery was purchased for `
8,00,000. You are required to show : (i) Machinery A/c (ii) Provision for
Deprecation A/c

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