; II year ` ) . A firm acquired a machine on 1st April at a cost of ` , . Its life is years. The firm writes off depreciation @ % p.a.
on the diminishing balance method. The firm closes its books on 31st December every year. Show the machinery account and depreciation account for three years starting from 1st April . ( Answer : Amount of depreciation: : ` , ; : ` , ; : ` , ; Balance in machinery a/c on - - ` , ) .
On 1st October , a truck was purchased for ` , , by Laxmi Transports Ltd. Depreciation was provided @ % p.a. under diminishing balance method. On 31st March , the above truck was sold for ` , , .
Accounts are closed on 31st March every year. Find out the profit or loss made on the sale of the truck. ( Answer : Amount of depreciation: - : ` , ; - : ` , , ; : ` , ; Loss on sale ` , ) . Raj & Co purchased a machine on 1st January for ` , .
On 1st July , they purchased another machine for ` , . On 1st January , they sold the machine purchased on 1st January for ` , . It was decided that the machine be depreciated at % per annum on diminishing balance method. Accounts are closed on 31st December every year.
Show the machinery account for the years and . ( Answer : Amount of depreciation: : ` , ; : ` , ; Loss on sale ` , ; Balance in machine a/c on . . ` , , ; on .
. ` , ). Accountancy To explore further Is it possible to exchange the old fixed asset with a new one? In such a case, what do you think will be the adjustment in terms of payment and accounting treatment?
Lucky & Co’s income statement shows a loss of ` , . The owner thinks that there is no need to provide for depreciation as the company has made a loss. He also suggests his accountant to change the