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    Assignment 2

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    Aayan Ahmed
    Farhan Limited purchased machinery for Rs. 1,600,000 on June 30, 2013 that had an 8 year useful life and residual value of Rs. 300,000. The company used the reducing balance method for depreciation from 2013-2015 and then switched to the straight line method in 2016. The machinery was then sold on May 1, 2018 for Rs. 400,000. The question asks to prepare a depreciation schedule and accounting entries to record the purchase, depreciation, and sale of the machinery.

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    Assignment 2

    Uploaded by

    Aayan Ahmed
    11 views1 page
    Farhan Limited purchased machinery for Rs. 1,600,000 on June 30, 2013 that had an 8 year useful life and residual value of Rs. 300,000. The company used the reducing balance method for depreciation from 2013-2015 and then switched to the straight line method in 2016. The machinery was then sold on May 1, 2018 for Rs. 400,000. The question asks to prepare a depreciation schedule and accounting entries to record the purchase, depreciation, and sale of the machinery.

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    Farhan Limited purchased machinery for Rs. 1,600,000 on June 30, 2013 that had an 8 year useful life and residual value of Rs. 300,000. The company used the reducing balance method for depreciation from 2013-2015 and then switched to the straight line method in 2016. The machinery was then sold on May 1, 2018 for Rs. 400,000. The question asks to prepare a depreciation schedule and accounting entries to record the purchase, depreciation, and sale of the machinery.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    11 views1 page

    Assignment 2

    Uploaded by

    Aayan Ahmed
    Farhan Limited purchased machinery for Rs. 1,600,000 on June 30, 2013 that had an 8 year useful life and residual value of Rs. 300,000. The company used the reducing balance method for depreciation from 2013-2015 and then switched to the straight line method in 2016. The machinery was then sold on May 1, 2018 for Rs. 400,000. The question asks to prepare a depreciation schedule and accounting entries to record the purchase, depreciation, and sale of the machinery.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 1

    Advanced Financial Accounting/Financial Reporting

    Assignemnt-2
    Farhan Limited purchased machinery for his factory located in Sialkot. Following are the details related
    to the machinery,

    Date Purchased June 30, 2013


    Cost of Machine Rs. 1,600,000
    Useful Life 8 Years
    Residual Value 300,000
    Sold on May 01, 2018
    Sales Proceeds 400,000
    Accounting Year January to December

    The company used reducing balance method of depreciation in the years 2013 till 2015. From year 2016
    onwards, the company changed its depreciation method to Straight line.

    Required:
    a) Prepare Depreciation Schedule. (4 Marks)
    b) Prepare all necessary accounting entries to record above mentioned events. (6 Marks)

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