Mgt101 gdb
#1

Kindly someone provide the solution of this gdb I'm to weak in this the question is given below.
GDB Question
 
On 1st April 2016, a manufacturing firm bought a machine for Rs. 120,000. The estimated useful life of this machine was determined by an engineering firm as 5 years with no residual value. Owing to a sudden mechanical breakdown in the machinery, it started losing its productivity. Management of the firm had decided to replace this machinery with the most updated version to maintain the productivity. The machine was sold on 31stDecember 2017 for Rs. 65,000 and on the same date a new machine was purchased. The firm uses straight line method of depreciation for its all non-current assets on “the basis of use”.  Its reported net profit in profit and loss account was Rs. 40,000 on 31st December 2017. The firm closes its books of account on 31st December each year.
 
Required:
 
1 - What will be the amount of: 
  1. depreciation on 31st December 2016?

  2. accumulated depreciation at the time of disposal of machinery?

  3. loss on the disposal of machine? 
 
2 - What will be the effect on reported profit as at 31st December 2017, if the firm changes its depreciation method from straight-line to written down value using 20% rate of depreciation per annum. (Working is not required. Just mention either the “Profit will be increased by Rs._____”  Or “Profit will be decreased by Rs._____” or “ No effect on profit”).
Reply
#2

Dear I Also need of solution plz help

Annual Deprecation Under Straight Line Method:
Depreciation = (Cost-Residual Value) / Expected Useful Life of the Asset
= 120,000-0/5
= 24,000 (Answer)
Machine Account:
Particulars Depreciation Written Down Value Accumulated Dep.
Dep. For the year 2016 = (24,000/12)x12
=18,000 102,000 18,000
Dep. For the year 2017 =24,000 42,000

Accumulated Depreciation = Dep. 1st Year + Dep. 2nd Year
= 18,000 + 24,000
= 42,000
Machine Account:
Written Down Value = Cost- Accumulated Deprecaiton
= 120,000-42,000
= 78,000 Answer
Profit & Loss On Machine = Sale Price - Written Down Value
= 65,000 – 78,000
= 13,000
Machine Account:
Dep. WDV Method Dep. 1st Year = [{(120,000x20)/100}/12}x9] =18,000
Dep. WDV Method Dep. 1st Year= 1020,000x20)/100 =20,400
Total Depreciation or Accumulated Depreciation =38,400
Written Down Value Profit & Loss on Machine
=Cost – Accumulated Depreciation
= 120,000 – 38,400
= 81,600
=Sale Price – Written Down Value
=65,000 – 81,600
=16, 600
Reply
#3

thanks for sharing
Reply


Possibly Related Threads…
Thread / Author Replies Views Last Post
Last Post by reewmella
09-18-2021, 02:43 PM
Last Post by Cheence
09-05-2021, 08:59 PM



Users browsing this thread: 1 Guest(s)