On 1st January, 2000 a firm purchased machinery worth Rs.100,000. On 1st September, 2002 it buys additional machinery worth Rs.27,000 and spends Rs.3,000 on its erection. The Accounts are closed each year on 31st December. Depreciation is written off 15% p.a. using Straight Line Method. You are required to prepare a Machinery Account for five years.
1.1.2000 Purchased machinery $100,000 Depreciation for 2000 $15,000 Nbv 31.12.2000 $85,000 Depreciation for 2001 $15,000 Nbv 31.12.2001 $70,000 1.9.2002 Purchased new machinery $30,000 Depreciation for 2002 $16,500 Nbv 31.12.2002 $83,500 Depreciation for 2003 $19,500 Nbv 31.12.2003 $64,000 Depreciation for 2004 $19,500 Nbv 31.12.2004 $44,500 Depreciation for 2005 $19,500 Nbv 31.12.2005 $25,000* *this nbv comprises $10,000 of the old machine and $15,000 of the new machine.
