Q.Kavya Enterprises purchased a machine on 1 July 2024 for ₹60,000, with an estimated life of 5 years and no scrap value, charging depreciation under the Straight Line Method (proportionate for part of a year), directly to the Asset Account. The accounting year ends on 31 March. Prepare the Machine Account for the years ended 31 March 2025, 2026 and 2027.

The first year's depreciation is proportionate for the 9 months the machine was actually held (1 July 2024 to 31 March 2025); every year after that gets the full ₹12,000 annual charge.

Full annual depreciation = Cost ÷ Life = ₹60,000 ÷ 5 = ₹12,000 (no scrap value to deduct).

Since the machine was purchased on 1 July 2024 and the accounting year ends 31 March, the FIRST period of ownership is only 9 months (July to March) out of the 2024-25 year, so the first year's depreciation is proportionate: 12,000 × 9/12 = ₹9,000.

Machine Account

A common error is charging a FULL year's depreciation (₹12,000) in the first year despite the machine being purchased only on 1 July, ignoring that it was held for just 9 of the 12 months of that accounting year — always che …