Solution For Neha’s Assignment

On 1st April 2015 Suman Traders purchased Machinery for ` 30,000. On 1st Oct, 2015, they purchased
further Machinery costing `20,000. On 1st Oct 2016 they sold the Machine purchased on 1st April 2015
for `18,000 and brought another Machine for `15,000 on the same date. Depreciation is provided on
Machinery @20% p.a. on the Diminishing Balance Method and financial year closes on 31st March every
year. Prepare the Machinery Account and Depreciation Account for the year 2015-16, 2016-17 and
2017-18

In the Books of Suman Traders

Machinery Account
DR CR
Date Particulars Jf Amount Date Particulars Jf Amount
1-Apr-15 To Bank/Cash M-1 30000 31-Mar-16 By Depreciation M-1 6000
1-102015 To Bank/Cash M-2 20000 31-Mar-16 By Depreciation M-2 2000
31-Mar-16 By Balance c/d M-1 24000
31-Mar-16 By Balance c/d M-2 18000
50000 50000
2016-17
1-Apr-16 To Balance b/d M-1 24000 1-Oct-16 By Bank M-22 Sold 18000
1-Apr-16 To Balance b/d M-2 18000 1-Oct-16 By Depreciation M-2 1800
1-Oct-16 To Profit on Sale M-2 1800 31-Mar-17 By Depreciation M-1 4800
1-Oct-16 To Bank of M-3 15000 31-Mar-17 By Depreciation M-3 1500
By Balance c/d M-1 19200
By Balance c/d M3 13500
58800 58800
2017-18
31-Mar-18
1-Apr-17 To Balance bd M-1 19000 By Depreciation M-1 3800
31-Mar-18
1-Apr-17 To Balancebd M-3 13500 By Depreciation M-3 2700
31-Mar-18
By Balance c/d M-1 15200
31-Mar-18
By Balance c/d M3 10800
32500 32500
2018-19 To Balance bd M-1 15200
To Balancebd M-3 10800