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ANDHRA PRADESH
CCP302.28 2
Recap:
In the last class we learned about
Concept of Depreciation under Diminishing
Balance Method
Advantages
Disadvantages
Differences between Fixed Instalment Method and
Diminishing Balance Method
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Illustration:
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Solution:-
Journal Entries
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Journal Entries
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Machinery Account
Dr Cr
Rs. Rs.
I yr To Cash a/c 40,000 By Depreciation 4,000
(40,000*10/100)
,, Balance c/d 36,000
40,000 40,000
II yr To Bal b/d 36,000 By Depreciation 3,600
,, Bal c/d 32,400
36,000 36,000
III yr To Bal b/d 32,400 By Depreciation 3,240
,, Bal c/d 29,160
32,400 32,400
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Depreciation Account
4,000 4,000
II yr To Machinery a/c 3,600 By P&L a/c 3,600
3,600 3,600
III yr To Machinery a/c 3,240 By P&L a/c 3,240
3,240 3,240
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Illustration
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Sol:
Journal Entries
Debit Credit
Date Particulars L.F Rs. Rs.
2002
Jan 1 Machinery a/c Dr. 50000
To Bank a/c 50000
2003
Dec 31 Depreciation a/c Dr. 4500
To Machinery a/c 4500
2003 2003
Jan 1 To Bal b/d 45000 Dec. 31 By Depreciation 4500
By Balance c/d 40500
45000 45000
2004
Jan 1 To Bal b/d 40500
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Depreciation Account
Dr. Cr
Date Particulars Rs. Date Particulars Rs.
2002 2000
Dec.31 To Machinery a/c 5,000 Dec. 31 By Profit & Loss a/c 5000
2003 2001
Dec. 31 To Machinery a/c 4500 Dec. 31 By Profit & Loss a/c 4500
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Assignment
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