M/s. JP Wires Co. purchased a second-hand machine on 1st January, 2017 for 3,20,000. Overhauling and erection charges amounted to 80,000. Another…

In the books of M/s. JP Wires Co. Machinery Account Date Particulars Amount Rs. Date Particulars Amount Rs. 1.1.2017 To Bank A/c 3,20,000 31.12.2017 By Depreciation A/c (₹ 80,000+16,000) 96,000 To Bank A/c (Erection charges) 80,000 31.12.2017 By Balance c/d (₹ 3,20,000+1,44,000) 4,64,000 1.7.2017 To Bank A/c 1,60,000 5,60,000 5,60,000 01.01.18 To Balance b/d 4,64,000 31.12.2018 By Depreciation A/c (₹ 80,000+32,000) 1,12,000 31.12.2018 By Balance c/d (₹ 2,40,000+1,12,000) 3,52,000 4,64,000 4,64,000 01.01.19 To Balance b/d 3,52,000 01.07.2019 By Bank A/c 1,60,000 30.9.19 To Bank A/c 60,000 By Profit and Loss A/c (Loss on Sale – W.N. ) 40,000 31.12.2019 By Depreciation A/c (₹ 40,000 +32,000 +3,000) 75,000 By Balance c/d (₹ 80,000 +57,000) 1,37,000 4,12,000 4,12,000 01.01.20 To Balance b/d 1,37,000 31.12.2020 By Depreciation A/c (₹ 12,000 +8,550) 20,550 By Balance c/d (₹ 68,000 +48,450) 1,16,450 1,37,000 1,37,000 Working Notes: Book Value of machines (straight line method) Particulars Machine I Rs. Machine II Rs. Machine III Rs. Cost 4,00,000 1,60,000 60,000 Depreciation for2017 80,000 16,000 Written down value as on 31.12.2017 3,20,000 1,44,000 Depreciation for2018 80,000 32,000 Written down value as on 31.12.2018 2,40,000 1,12,000 Depreciation for2019 40,000 32,000 Written down value as on 31.12.2019 2,00,000 80,000 Sale proceeds 1,60,000 Loss on sale 40,000