Pokemon and Brothers purchased a Machinery for Rs.3,00,000 on April 01,2014 and spent Rs.40,000 for its installation. The salvage value of the machine after its useful life for 5 years, is estimated to be Rs.5,000. Record journal entries for the year 2014-2015 and draw up Machine Account and Depreciation Account for first 2 years given that the depreciation is charged using straight line method if the books of accounts close on March 31 every year and the firm charges depreciation to the asset account.

 

Asked by Topperlearning User | 4th Aug, 2016, 01:26: PM

Expert Answer:

 

Books of Pokemon and Brothers

Journal Entries

Date

Particulars

 

L.F.

Debit

Rs. 

Credit

Rs. 

2014

 

 

 

 

 

Apr 1

Machinery A/c

Dr.

 

3,00,000

 

 

-------To Bank A/c

 

 

 

3,00,000

 

(Being machinery purchased for Rs.3,00,000)

 

 

 

 

2014

 

 

 

 

 

Apr 1

Machinery A/c

Dr.

 

40,000

 

 

-------To Bank A/c

 

 

 

40,000

 

(Being expenses incurred on installation)

 

 

 

 

2015

 

 

 

 

 

Mar 31

Depreciation A/c

Dr.

 

67,000

 

 

-------To Machinery A/c

 

 

 

67,000

 

(Being depreciation charged on assets)

 

 

 

 

2015

 

 

 

 

 

Mar 31

Profit and Loss A/c

Dr.

 

67,000

 

 

-------To Depreciation A/c

 

 

 

67,000

 

(Being depreciation debited to profit and loss account)

 

 

 

 

2016

 

 

 

Answered by  | 4th Aug, 2016, 03:26: PM