A company has the following balances on 1st January,2014:
Machinery a/c Rs. 5,00,000
Provision for depreciation a/c Rs. 80,000
On 1st October,2014, one fifth of the machinery (01/Jan/2014), which was purchased on 1st January,2012 was sold at a loss of 20% and a new machinery was purchased for rs. 3,00,000 on the same date.
Prepare machinery a/c and provision for depreciation account for the year ending 31st December,2014, assuming the firm has been charging depreciation at 10% per annum on WDV.