M/s. Bharat Electricals purchased a second -hand machine on 1st April, 2023 for 3,20,000. Overhauling and erection charges amounted to 80,000.…
CA Foundation · Accounting · MTP · May 2026
M/s. Bharat Electricals purchased a second -hand machine on 1st April, 2023 for 3,20,000. Overhauling and erection charges amounted to 80,000. Another machine was purchased for 1,60,000 on 1st October , 2023. On 1st October , 2025, the machine installed on 1st April , 2023 was sold for 1,60,000. Another machine amounted to 60,000 was purchased on 1st October, 2025 and was ready to use on 31st December , 2025. Under the existing practice the company provides depreciation @ 20% p.a. on original cost. However, from 1st April, 2025 it decided to adopt WDV method and to charge depreciation @ 15% p.a. You are required to prepare Machinery account for the period1st April, 2023 to 31st March, 2026.
Suggested Answer and Working Notes:
Total Purchases = Credit Purchases - 2,70,000 + Cash Purchases - 1,97,800 = 4,67,800
Topics: Depreciation and Amortisation
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