I want know the accounting entry for below mentioned transcation.
machinery purchased RS.10000 in 2011, depreciation charged on 2012 RS 1000, and machinery sold in 2013 for rs 11000. what are the entry to be passed
8 Replies
JAINENDRA JAIN
(ACS/CA)
(1668 Points)
Replied 27 March 2014
cash/bank a/c dr 11000
to machinery a/c 9000
to profit on sale of machinery 2000
Kunal Pansari
(Accountant)
(1037 Points)
Replied 31 March 2014
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Mr. Jainendra Jain, your answers does not reflect any entry of depreciation. So in my opinion the entry would go like below:
While Purchase of Machinery Machinery A/c Dr. Rs. 10000 Cash/Bank A/c Cr. Rs. 10000
Depreciation of Machinery Depreciation A/c Dr. Rs. 1000 Machinery A/c Dr. 1000
Sell of Machinery At the time of selling, the closing value of machine is Rs. 10000 (11000-1000) So the entry would be as: Cash/Bank A/c Dr. 11000 (The amount at which the machine was sold) Machinery A/c Cr. 10000 Profit & Loss A/c Cr. 1000
Originally posted by : JAINENDRA JAIN |
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cash/bank a/c dr 11000 to machinery a/c 9000 to profit on sale of machinery 2000 |
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JAINENDRA JAIN
(ACS/CA)
(1668 Points)
Replied 31 March 2014
IN REPLY TO KUNAL PANSARI.
THE QUESTION DEMANDED ENTRY FOR SALE OF MACHINERY.
SO I REPLIED IN THAT WAY.
HOWEVER U ARE ALSO CORRECT.
Danish
(GST Practitioner)
(219 Points)
Replied 31 March 2014
Dear Gireesh,
Simply,
Purchase Of Machinery:
Machinery A/c Dr 10000
To Cash/Bank A/c Cr 10000
--------------------------------------------
Depreciation A/c Dr 1000
To Machinery A/c Cr 1000 [Here I Request Kunal To check]
------------------------------------------------------------------------------
Depreciation A/c Dr 1000 [Considering 1000 As Depreciation For 2013]
To Machinery A/c Cr 1000
----------------------------------------------------------------------------------------------------------------
Bank/Cash A/c Dr 11000
To Machinery A/c Cr 8000[Book Balance Of Machine Must Be Zero After This Entry As Depreciation Charged On 2012 & 2013]
To P&L A/c Cr 3000
1.The value of Machinery In Your Books Should Be 8000 Before sale (as 1000 depreciation was already charged & 1000 Considered As depreciation for 2013)
Kunal Pansari
(Accountant)
(1037 Points)
Replied 31 March 2014
|
Dear Danish, in your reply I would like to say that first of all we need to know the date of selling of machinery because in case if machine was sold on April 2013, we cannot deprecitate the machinery for the whole financial year 2013-2014 and also it is said that machine was purchased on 2011 but no month was mentioned. Originally posted by : Danish |
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Dear Gireesh, Simply, Purchase Of Machinery: Machinery A/c Dr 10000 To Cash/Bank A/c Cr 10000 -------------------------------------------- Depreciation A/c Dr 1000 To Machinery A/c Cr 1000 [Here I Request Kunal To check] ------------------------------------------------------------------------------ Depreciation A/c Dr 1000 [Considering 1000 As Depreciation For 2013] To Machinery A/c Cr 1000 ---------------------------------------------------------------------------------------------------------------- Bank/Cash A/c Dr 11000 To Machinery A/c Cr 8000[Book Balance Of Machine Must Be Zero After This Entry As Depreciation Charged On 2012 & 2013] To P&L A/c Cr 3000 1.The value of Machinery In Your Books Should Be 8000 Before sale (as 1000 depreciation was already charged & 1000 Considered As depreciation for 2013) |
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Danish
(GST Practitioner)
(219 Points)
Replied 31 March 2014
| Originally posted by : Kunal Pansari | ||
|
Dear Danish, in your reply I would like to say that first of all we need to know the date of selling of machinery because in case if machine was sold on April 2013, we cannot deprecitate the machinery for the whole financial year 2013-2014 Originally posted by : Danish Dear Gireesh, Simply, Purchase Of Machinery: Machinery A/c Dr 10000 To Cash/Bank A/c Cr 10000 -------------------------------------------- Depreciation A/c Dr 1000 To Machinery A/c Cr 1000 [Here I Request Kunal To check] ------------------------------------------------------------------------------ Depreciation A/c Dr 1000 [Considering 1000 As Depreciation For 2013] To Machinery A/c Cr 1000 ---------------------------------------------------------------------------------------------------------------- Bank/Cash A/c Dr 11000 To Machinery A/c Cr 8000[Book Balance Of Machine Must Be Zero After This Entry As Depreciation Charged On 2012 & 2013] To P&L A/c Cr 3000 1.The value of Machinery In Your Books Should Be 8000 Before sale (as 1000 depreciation was already charged & 1000 Considered As depreciation for 2013) |
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Thankyou Kunal For Quote
I Had it In Mind That The Date Is Matters Thats Why I clearly Mentioned "Considering"
Gireesh' you Should Have to Charge Depreciation On Machinery Other Than If It Sold on 1st Of April -13
Kunal Pansari
(Accountant)
(1037 Points)
Replied 31 March 2014
|
Danish, what is the rate of depreciation for Furnitre in an annum? If I am not wrong, it is 15% Originally posted by : Danish |
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Originally posted by : Kunal Pansari Dear Danish, in your reply I would like to say that first of all we need to know the date of selling of machinery because in case if machine was sold on April 2013, we cannot deprecitate the machinery for the whole financial year 2013-2014 Originally posted by : Danish Dear Gireesh, Simply, Purchase Of Machinery: Machinery A/c Dr 10000 To Cash/Bank A/c Cr 10000 -------------------------------------------- Depreciation A/c Dr 1000 To Machinery A/c Cr 1000 [Here I Request Kunal To check] ------------------------------------------------------------------------------ Depreciation A/c Dr 1000 [Considering 1000 As Depreciation For 2013] To Machinery A/c Cr 1000 ---------------------------------------------------------------------------------------------------------------- Bank/Cash A/c Dr 11000 To Machinery A/c Cr 8000[Book Balance Of Machine Must Be Zero After This Entry As Depreciation Charged On 2012 & 2013] To P&L A/c Cr 3000 1.The value of Machinery In Your Books Should Be 8000 Before sale (as 1000 depreciation was already charged & 1000 Considered As depreciation for 2013) Thankyou Kunal For Quote I Had it In Mind That The Date Is Matters Thats Why I clearly Mentioned "Considering" Gireesh' you Should Have to Charge Depreciation On Machinery Other Than If It Sold on 1st Of April -13 |
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Danish
(GST Practitioner)
(219 Points)
Replied 31 March 2014
RATES OF DEPRECIATION AS PER COMPANIES ACT, 1956
SCHEDULE XIV
|
FURNITURE AND FITTINGS |
W.D.V % |
S L M % |
| 1. General rates (NESD) | 18.1 | 6.33 |
| 2.Rate for furniture and fittings used in hotels, restaurants and boarding houses, schools, colleges and other educational institutions, libraries, welfare centres, meeting halls, cinema houses, theatres and circus, and for furniture and fittings let out on hire for use on the occasion of marriages and similar functions (NESD) | 25.88 | 9.5 |
As per IT 10 %
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