Page 141 - DCOM101_FINANCIAL_ACCOUNTING_I

Unit 11: Depreciation Accounting

Accounting Journal entries for the year 2000-01: Notes

During the year 1st April 2,000 - ` 3,00,000 worth of machinery was bought:
` `
1 April, 2000 Machinery A/c Dr 3,00,000
To Bank A/c 3,00,000
Being the machinery is purchased
Depreciation for the year 2000 for the fi rst machinery:

` `
31 Mar, 2001 Depreciation A/c Dr 30,000
st
To Machinery A/c 30,000
Being depreciation charged
Accounting Journal entries for the year 2001-02:
Depreciation for the year 2001 for the fi rst machinery

` `
31 Mar, 2001 Depreciation A/c Dr 27,000
st
To Machinery A/c 27,000
Being depreciation charged

Accounting Journal entries for the year 2002-03
During the year 2002 new machinery worth of ` 60,000 was purchased. Before determining the
volume of depreciation, the amount of original value of the machinery should be found out.
Original value of the asset = The purchase price of the asset + Erection charges incurred
= ` 60,000 + ` 6,000 = ` 66,000
` `
1 April, 2002 Machinery A/c Dr 66,000
To Bank A/c 66,000
Being the machinery is purchased
Depreciation for the year 2002 for the fi rst machinery:

` `
31 March, 2003 Depreciation A/c Dr 24,300
st
To Machinery A/c 24,300
Being depreciation charged
Depreciation for the year 2002 for the second machinery:

` `
31 Mar,2003 Depreciation A/c Dr 3,300
st
To Machinery A/c 3,300
Being depreciation charged

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