Business Case Studies, Finance, Accounting and Control Case Study, Berkshire Hathaway Inc,Warren Buffet's Investment Philosophy

Code : FAC0065

Year : 2023

Industry : Industrial Goods & Machinery

Region : Asia

Teaching Note: Available

Structured Assignment : Not Available

Introduction: In the first week of March 2022, Rama Raju (Raju), a first-year MBA student of a reputed business school based in Hyderabad, reported to S. Gopal Rao (Rao), Accounts Manager, Hyderabad Industrial Equipment Manufacturers Limited (HIEML), a company engaged in the manufacture of medium to low value industrial equipment, for his summer internship project (SIP)..

The Four Situations Related to Deprecation: On August 1, 2018, HIEML had purchased Machine I for Rs. 120,000. The company purchased another machine (Machine II) on October 1, 2019, for Rs. 80,000. On June 30, 2020, HIEML sold Machine I for Rs. 85,000 and on the same date purchased Machine III for Rs. 200,000. The company charged depreciation on machines at the rate of 20% per annum (p.a.) on the original cost. HIEML closed its accounts each year on March 31. Raju had to calculate the profit/loss on the sale of Machine I and the book value of Machines II and III as on March 31, 2021..