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On 1st January, 2005, VK Ltd. Purchased machinery for Rs.2,40,000 and on 30th June 2006, it acquired additional machinery at a cost of Rs.40,000. On 31st March, 2007, one of the original machine (purchased on 1st January, 2005) which had cost of Rs.10,000 was found to have become obsolete and was sold as scrap for Rs.1,000. It was replaced on that date by a new machine costing Rs.16,000. Depreciation is to be provided 15% p.a. on the written down value. Show machinery account by following calendar year.

Answer»

On 1st January, 2005, VK Ltd. Purchased machinery for Rs.2,40,000 and on 30th June 2006, it acquired additional machinery at a cost of Rs.40,000. On 31st March, 2007, one of the original machine (purchased on 1st January, 2005) which had cost of Rs.10,000 was found to have become obsolete and was sold as scrap for Rs.1,000. It was replaced on that date by a new machine costing Rs.16,000. Depreciation is to be provided 15% p.a. on the written down value. Show machinery account by following calendar year.



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