purchased another machine for ` , . On 1st July , the company sold the machine purchased on 1st January for ` , . It was decided that the machine be depreciated at % per annum on diminishing balance method. Show the machinery account for the years to .
The accounts are closed on December 31st, every year. Accountancy Solution Ledger accounts Machinery Account Cr. Jan July To Bank A/c To Bank A/c , , Dec Dec By Depreciation* A/c By Balance c/d , , , , , , , Jan To Balance b/d , , July July July Dec Dec By Depreciation A/c By Bank A/c By Profit and Loss A/c By Depreciation A/c* By Balance c/d , , , , , , , , , Jan To Balance b/d , Dec Dec By Depreciation A/c ( , × %) By Balance c/d , , , , Jan To Balance b/d , * Note: . Computation of depreciation for the year Asset purchased on .
. : , x % = , Asset purchased on . . : , x %x6/ = , ` , .
Computation of depreciation on the asset sold on . . Original cost on . .
= , Less : Depreciation for ( , x %) = , Written down value on . . , Less : Depreciation for upto . .
( , x %x6/ ) = , Book value , Sale price , Loss on sale of asset , . Depreciation for for the asset purchased on . . Original cost on .
. = , Less: Depreciation for ( , x %x6/ ) = , Written down value on . . , Less : Depreciation for ( , x %) = , Accountancy Self-examination questions I Multiple choice questions Choose the correct answer .
Under straight line method, the amount of depreciation is (a) Increasing every year (b) Decreasing every year (c) Constant for all the years (d) Fluctuating every year . If the total charge of depreciation