Questions

Q1. A machine is purchase at the cost of Rs. 50,000 with estimated life 10 years its scrap value at the end of its useful life is Rs. 5,000 and the rate of depreciation is 10%. You are required to calculate the depreciation expense of first 2 year under each of the following method separately. Apply below mention methods. a) Straight Line Method. b) Declining Balance Method. c) Sum of Year Digit Method.

Q2The ABC & company discloses the following information for the month of Nov 2017. 1) 2) 3) 4) 5) 6)

Nov. 01: Beginning inventory, 600 units @ $5 each each. Nov. 10: Sold 400 units @ $12 each. Nov. 11: Purchased 1,600 units @ $6 each. Nov. 15: Sold 1,000 units @ $12.50 each. Nov. 20: Purchased 1,000 units @ $6.50 each. Nov. 27: Sold 600 units @ $13.50 each.

Required: Assume the ABC & company uses periodic inventory system, compute cost of goods sold ending inventory and gross profit under: (a). FIFO (b). LIFO Q3. ANC & Co Purchase a machine on Apr 1 2015 at the list price of Rs 100,000 with term of 2/10 , n/30.The Company paid the following additional expenses in acquisition of the machine on the same date Sale Tax 15% Freight Charges 12500 Other Expense 1500 Installation Charges 4000 The management of the company decided that the estimated life of the machine was 10 years and the residual value was Rs 5000 the company uses the straight line method for charging deprecation The company accounting year end is December 31 of each year Required 1-compute the cost machine & pass general Journal entries to record the acquisition of the machine 2- Compute the annual depreciation expense of the machine 3- Compute the depreciation expense and accumulated depreciation for Dec 31 2015, 2016,2017 and 2018 . 4- Pass journal to record the depreciation expense for the year ended Dec 31 2015,2016,2017 & 2018. 5 prepare the partial balance sheet as on Dec 2015, 2016,2017 & 2018.