Machinery Purchase

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 May 2011 Sir,
On 2/4/2010 Machinery Purchased for Rs.2lacs, The Opening Balance of Capital A/c is Rs.7.42 lacs, and the Drawing is Rs.1.5lacs during the year 2010-11. The Net profit is Rs.1.90lacs

Can I deduct 2 lacs of Machinery from my Capital A/c ? Is this entry Correct?
To Drawings 1.5 By Open Bal 7.42
To Machines 2.0 By Net Profit 1.90
To Bal c/d 5.82

Total 9.32 Total 9.32

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)
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21 May 2011 Why do you want to deduct the amount of machinery from capital? There is no logic for deducting the amount from capital. Please clarify in detail about the question.