Question 10 Chapter 11 – Unimax Publications of Class 11

Question 10 Chapter 11 – Unimax Publications of Class 11

X Ltd. has imported a machinery on 1st July, 2021 for ₹ 1,28,000, paid customs duty and freight ₹ 65,000 and incurred erection charges ₹ 48,000. Another local machinery costing ₹ 80,000 was purchased on January 1, 2022. On 1st July 2022, a portion of the imported machinery (value one-third) got out of order and was sold for ₹ 27,840. Another machinery was purchased to replace the same for ₹ 40,000 on 1.7.19. depreciation is being provided @ 20% p.a. on original cost of the machinery. Show machinery account for 2021, 2022 and 2023 ending as on 31Dec. each year.

The solution of Question 10 Chapter 11 – Unimax Publications of Class 11

Dr.	Machine A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
01/07/21	To Bank A/c		1,28,000	31/12/21	By Deprecation A/c		24,000
01/07/21	To Bank A/c		65,000	31/12/21	By Balance C/d		2,16,000
01/07/21	To Bank A/c		48,000
			2,40,000				2,40,000
01/01/18	To Balance b/d		2,16,000	01/12/23	By Deprecation A/c		64,000
01/01/18	To Bank A/c		80,000	31/12/23	By Balance C/d		2,32,000
			2,96,000				2,96,000
01/01/23	To Balance b/d		2,32,000	01/07/23	By Bank A/c		27,840
01/07/23	To Bank A/c		40,000	01/07/23	By Profit & Loss A/c		20,160
				31/12/23	By Deprecation A/c		60,000
				31/12/23	By Balance C/d		1,64,000
			2,72,000				2,72,000

Working Note:
(1) Annual depreciation on imported machinery purchased on July 1,2021 = ₹ 48,000.
(2) Annual depreciation on machinery purchased on Jan.1, 2022 = ₹ 16,000.
(3) Book value of one third part of imported machine, on date July 1,2022 = ₹ 48,000.
(4) Loss on sale of machinery = ₹ (48,000-27,840) = ₹ 20,160.
(5) Annual depreciation on machinery purchased on July 1,2023 = ₹ 8,000.