The balance of Machinery Account of a firm on 1st April, 2024 was - 42,81,000. Out of this, a plant having book value of 3,24,000 as on 1st April,…
CA Foundation · Accounting · MTP · April 2025
The balance of Machinery Account of a firm on 1st April, 2024 was - 42,81,000. Out of this, a plant having book value of 3,24,000 as on 1st April, 2024 was sold on 1st July, 2024 for 1,23,000. On the same date a new plant was purchased for 6,87,000 and - 33,000 was spent on its erection. On 1st November, 2024 a new machine was purchased for 8,40,000. Depreciation is written off @15% per annum under the diminishing balance method. Calculate the depreciation for the year ended 31st March, 2025.
Suggested Answer and Working Notes:
Calculation of depreciation for the year ended 31.3.25 Machine I (₹ 42,81,000 -3,24,000) Machine II Purchased on 1st July Machine III Purchased on 1st Nov Depreciation on sold machine IV Book value as on 1st April, 2024 39,57,000 7,20,000 8,40,000 3,24,000 Depreciation @15% 5,93,550 (for full year) 81,000 (for9 months) 52,500 (for5 months) 12,150 (for3 months) Total depreciation (I + II + III + IV) 7,39,200
Topics: Depreciation and Amortisation
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