P. Ltd. Which depreciates its machinery @ 10% p.a. on written down value desires to change the basis to straight line method, the rate remaining the same. The decision is taken on 31st December, 2015 to be effective from 1st January, 2013. On 1st January, 2015 the balance in the machinery account is $ 29,16,000. On 1st July, 2015 a part of machinery purchased on 1st January, 2013 for $ 2,40,000 was sold for $ 1,35,000. On the same date a new machine is purchased for $ 4,50,000 and installed at a cost of $ 24,000. Prepare Machinery Account for 2015.
P. Ltd. Which depreciates its machinery @ 10% p.a. on written down value desires to change the basis to straight line method, the rate remaining the same. The decision is taken on 31st December, 2015 to be effective from 1st January, 2013. On 1st January, 2015 the balance in the machinery account is $ 29,16,000. On 1st July, 2015 a part of machinery purchased on 1st January, 2013 for $ 2,40,000 was sold for $ 1,35,000. On the same date a new machine is purchased for $ 4,50,000 and installed at a cost of $ 24,000. Prepare Machinery Account for 2015.
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles
Section: Chapter Questions
Problem 8.5E: Change in Estimate Assume that Bloomer Company purchased a new machine on January 1, 2016, for...
Related questions
Concept explainers
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Topic Video
Question
P. Ltd. Which depreciates its machinery @ 10% p.a. on written down value desires to change the basis to straight line method , the rate remaining the same. The decision is taken on 31st December, 2015 to be effective from 1st January, 2013.
On 1st January, 2015 the balance in the machinery account is $ 29,16,000.
On 1st July, 2015 a part of machinery purchased on 1st January, 2013 for $ 2,40,000 was sold for $ 1,35,000. On the same date a new machine is purchased for $ 4,50,000 and installed at a cost of $ 24,000.
Prepare Machinery Account for 2015.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College