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Straight Line Depreciation Report

The document outlines the calculation of annual depreciation using the straight-line method, resulting in Rs. 20,000 per year over a useful life of 10 years. It includes adjusting entries for depreciation expenses from 2001 to 2003, along with a detailed allowance for depreciation account. Additionally, it presents the balance sheet information showing the net book value of the machine decreasing from Rs. 230,000 in 2001 to Rs. 190,000 in 2003 due to accumulated depreciation.

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9 views2 pages

Straight Line Depreciation Report

The document outlines the calculation of annual depreciation using the straight-line method, resulting in Rs. 20,000 per year over a useful life of 10 years. It includes adjusting entries for depreciation expenses from 2001 to 2003, along with a detailed allowance for depreciation account. Additionally, it presents the balance sheet information showing the net book value of the machine decreasing from Rs. 230,000 in 2001 to Rs. 190,000 in 2003 due to accumulated depreciation.

Uploaded by

shamoonahm3xd
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Depreciation Calculation using Straight Line Method

1. Depreciation Calculation

Annual Depreciation = (Cost - Salvage Value) / Useful Life

= (250,000 - 50,000) / 10 = Rs. 20,000 per year

2. Adjusting Entries

For each year 2001, 2002, 2003:

Depreciation Expense A/C Dr. 20,000

To Accumulated Depreciation A/C 20,000

3. Allowance for Depreciation Account

Date Particulars Debit (Rs.) Credit (Rs.) Balance (Rs.)

31-Dec-2001 Depreciation 20,000 20,000

31-Dec-2002 Depreciation 20,000 40,000

31-Dec-2003 Depreciation 20,000 60,000

4. Depreciation in Income Statement

2001: Rs. 20,000

2002: Rs. 20,000

2003: Rs. 20,000

5. Balance Sheet Presentation

As on December 31, 2001

Machine Cost: 250,000

Less Accumulated Depreciation: 20,000


Depreciation Calculation using Straight Line Method

Net Book Value: 230,000

As on December 31, 2002

Machine Cost: 250,000

Less Accumulated Depreciation: 40,000

Net Book Value: 210,000

As on December 31, 2003

Machine Cost: 250,000

Less Accumulated Depreciation: 60,000

Net Book Value: 190,000

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