Question

On 1.1.2001, Anil and Co. purchases machinery for ₹19000 and spend ₹1500 for its installation. Show machinery account for 2001, 2002 and 2003 if the company writes off depreciation at 20% p.a. on diminishing balance method.

Answer 1

Dr					Cr
Date	Particulars	Amount	Date	Particulars	Amount
1/1/2001	Cash (19000 + 1500)	20500	31/12/01	Depreciation (20500 \(\times\) 10/100) Balance c/d	4100 16400
		20500			20500
1/1/2002	Balance b/d	16400	31/12/02	Depreciation (16400 \(\times\) 10/100) Balance c/d	3280 13120
		16400			16400
1/1/2003	Balance b/d	13120	31/12/03	Depreciation (13120 \(\times\) 10/100) Balance c/d	2624 10496
		13120			13120