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 Cost Of Machine 680,000 Life of Machine 6 years Residual Value 50,000
 Straight Line Method Depreciation per year = Total Cost-Salvage Value Life of the asset = 680000-50000 6 = 1,05,000
 Depreciation for year ending Amount Jun-16 52,500 Jun-17 1,05,000 Jun-18 1,05,000 Jun-19 1,05,000 Jun-20 1,05,000
 Diminishing Balance Method Depreciation rate per year = 1-(Estimated Scrap/Original Value)^(1/Life of the asset) = 1-(50000/680000)^(1/6) = 0.35
 Depreciation for year ending Opening Value Depreciation WDV Jun-16 6,80,000 1,19,000 5,61,000 Jun-17 5,61,000 1,96,350 3,64,650 Jun-18 3,64,650 1,27,628 2,37,023 Jun-19 2,37,023 82,958 1,54,065 Jun-20 1,54,065 53,923 1,00,142
 Date Particulars Debit Amount Credit Amount Dec-01 Hairdressing Equipment ……….dr 57,000 To Deposit for Hairdressing Equipment 5,000 To Creditor for Hairdressing Equipment 52,000 (Being Hairdressing equipment purchased with \$5000 as deposit and \$52000 payable in 60 days) Dec-03 H. Horton Drawings ……….dr 1,400 To Cash at Bank 1,400 (Being Drawn for personal use) Dec-08 Salaries Expense ……….dr 7,200 To Cash at Bank 7,200 (Being Salary expenses paid) Dec-14 Capital and Advertising Expense……….dr 600 To Cash at Bank 600 (Being Advertisement expenses incurred and paid) Dec-19 Cash at Bank ……….dr 830 To Accounts Receivable 830 (Being balance received from customers) Dec-23 Accounts Payable ……….dr 2,400 To Cash at Bank 2,400 (Being payment made for supplies purchased on credit) Dec-27 Cash at Bank ……….dr 85,000 To H. Horton Capital 85,000 (Being inheritance received which is to be used in business) Dec-30 Cash at Bank ……….dr 46,080 Accounts Receivable……….dr 11,520 To Lesson Revenue 57,600 (Being Lesson revenue earned of which \$ 11520 is to be received in a month)
 Accounts Payable Particulars Amount Particulars Amount To Cash at Bank 2,400 By Bal c/d 2,400 2,400 2,400 Accounts Receivable Particulars Amount Particulars Amount To Lesson Revenue 11,520 By Cash at Bank 830 By Bal c/d 10,690 11,520 11,520 Capital and Advertising Expense Particulars Amount Particulars Amount To Cash at Bank 600 By Bal c/d 600 600 600 Cash at Bank Particulars Amount Particulars Amount To Accounts Receivable 830 By H. Horton Drawings 1,400 To H. Horton Capital 85,000 By Salaries Expense 7,200 To Lesson Revenue 46,080 By Capital and Advertising Expense 600 By Accounts Payable 2400 By Bal c/d 1,20,310 1,31,910 11,600 Creditor for Hairdressing Equipment Particulars Amount Particulars Amount To Bal c/d 52,000 By Hairdressing Equipment 52,000 52,000 52,000 Deposit for Hairdressing Equipment Particulars Amount Particulars Amount To Bal c/d 5,000 By Hairdressing Equipment 5,000 5,000 5,000 H. Horton Capital Particulars Amount Particulars Amount To bal c/d 85,000 By Cash at Bank 85,000 85,000 85,000 H. Horton Drawings Particulars Amount Particulars Amount To Cash at Bank 1,400 By Bal c/d 1,400 1,400 1,400 Hairdressing Equipment Particulars Amount Particulars Amount To Deposit for Hairdressing Equipment 5,000 By Bal c/d 57,000 To Creditor for Hairdressing Equipment 52,000 57,000 57,000 Lesson Revenue Particulars Amount Particulars Amount To bal c/d 57,600 By Cash at Bank 46,080 By Accounts Receivable 11,520 57,600 57,600 Salaries Expense Particulars Amount Particulars Amount To Cash at Bank 7,200 By Bal c/d 7,200 7,200 7,200
 Moving Average Average Rate = Units*Rate Total Unit = (90*7)+(90*8)+(110*9) 90+90+110 = 2340 290 = 8.07
 Date Particular Units Rate Value 01-May Opening Stock 90 7.00 630.00 03-May Purchased 90 8.00 720.00 10-May Purchased 110 9.00 990.00 12-May Sold -90 8.07 -726.30 17-May Sold -80 8.07 -645.60 25-May Sold -40 8.07 -322.80 30-May Closing Stock 80 8.07 645.30
 Cost Of Sales 1,694.70
 FIFO Date Particular Units Rate Value 01-May Opening Stock 90 7.00 630.00 03-May Purchased 90 8.00 720.00 10-May Purchased 110 9.00 990.00 12-May Sold -90 7.00 -630.00 17-May Sold -80 8.00 -640.00 25-May Sold -10 8.00 -80.00 25-May Sold -30 9.00 -270.00 30-May Closing Stock 80 8.07 720.00
 Cost Of Sales 1,620.00

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