Page 142 - DCOM101_FINANCIAL_ACCOUNTING_I

Financial Accounting-I

Notes After passing the journal entries, the next step is to prepare ledger account of machinery.

Dr Machinery A/c (2000-01) Cr
Date Particulars Amount ` Date Particulars Amount `
1 April, 2000 To Bank 3,00,000 31 Mar, 2001 By Depreciation 30,000
st
st
By Balance c/d 2,70,000
3,00,000 3,00,000
st
31 March, 2001 To Balance B/d 2,70,000
Transfer to Machinery
A/c (20001-02)
Dr Machinery A/c (2001-02) Cr
Date Particulars Amount ` Date Particulars Amount `
st
st
1 April, 2000 To Balance B/d 2,70,000 31 Mar, 2001 By Depreciation 27,000
By Balance c/d 2,43,000
2,70,000 2,70,000
31 Mar, 2001 To Balance B/d 2,43,000
st
Transfer to Machinery
A/c (2002-03)
Dr Machinery A/c (2002-03) Cr
Date Particulars Amount ` Date Particulars Amount `
1 April, 2000 To Balance B/d 2,43,000 31 Mar, 2001 By Depreciation 24,300
st
st
First machinery
1 Oct, 2002 To Bank 66,000 By Depreciation 3,300
st
Second machinery
By Balance c/d 2,81,400
3,09,000 3,09,000
31 Mar, 2003 To Balance B/d 2,81,400
st

Caselet
ata Steel Ltd. wants to establish its EOU in the state of Orissa through exploration
of iron ore. It identified that the state of Orissa is one of the ideal states having

Tgreater potential of iron ore than any other state in India. The fi rm has reached lease
contract with the Government of Orissa for the amount of `200 Cr towards the extraction
of 40,00,000 tonnes iron ore from the field for 10 years.

The firm would like to establish a processing plant which amounts to `50 Cr to produce

the quality carbon steel for the foreign industrial buyers. The life period of the machine is
denominated in terms of 2,50,000 working hours. The firm is required to extract the iron

ore.
Year 1 2 3 4 5 6 7 8 9 10
Expected 8 7 6 5 4 3 3 2 1 1
Extraction
Per Year
In Lakh
Hrs. 1,00,000 75,000 25,000 12,500 6,250 6,250 6,250 6,250 6,250 6,250
Working
Contd...

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