A purchased machinery on 01.01.2021 for 1,94,000 and spent - 6,000 on its erection. On 01.07.2021, additional Machinery costing - 1,00,000 were…

Machinery Account Date Particulars Amount Date Particulars Amount 01.01.2021 To Bank A/c 1,94,000 31.12.2021 By Depreciation A/c(WN - 1) 25,000 01.01.2021 To Bank A/c (M 1) 6,000 31.12.2021 By Balance c/d 2,75,000 01.07.2021 To Bank A/c (M 2) (Purchase Price) 1,00,000 3,00,000 3,00,000 01.01.2022 To Balance b/d 2,75,000 31.12.2022 By Depreciation A/c 30,000 31.12.2022 By Balance c/d 2,45,000 2,75,000 2,75,000 01.01.2023 To Balance b/d 2,45,000 01.01.2023 By Bank A/c (Sale) (M 1) 1,00,000 01.07.2023 To Bank A/c (M 3) 1,50,000 01.01.2023 By P&L A/c Loss on sale of machinery 60,000 31.12.2023 By Depreciation A/c on remaining machineries 17,500 31.12.2022 By Balance c/d 2,17,500 3,95,000 3,95,000 01.01.2024 To Balance b/d 2,17,500 31.12.2024 By Depreciation (15%X 2,17,500) 32,625 31.12.2024 By Balance c/d 1,84,875 2,17,500 2,17,500 Working Notes: 1. Calculation of Depreciation (10% per annum on the Original Cost) Machinery purchased on M 101.01.2021 M 201.07.2021 M 301.07.2023 Cost 2,00,000 1,00,000 1,50,000 Depreciation for Year 2021 20,000 5,000 - Depreciation for Year 2022 20,000 10,000 - Depreciation for Year 2023 M 2 =2 months M 3 = 5.5 months - 10,000 7,500 2. Calculation of Loss on Sale of Machinery Particulars Amount Original Cost (including Erection Charges) 2,00,000 Less: Total Depreciation (on M 1) [Year 1 & Year 2] 40,000 Written Down Value on the Sale of machinery 1,60,000 Less: Sale Proceeds 1,00,000 Loss on Sale of Machinery 60,000