Question 19 Chapter 11 – Unimax Publications of Class 11

Question 19 Chapter 11 – Unimax Publications of Class 11

A firm purchased on 1st January, 2017 certain machinery for ₹ 5,82,000 and spent ₹ 10,8000 on its erection. On 1st July, 2017, additional machinery costing ₹ 2,00,000 was purchased. On 1st July,2019, the machinery purchased on 1st January, 2017 was auctioned for ₹ 2,86,000 and a fresh machinery for ₹ 4,00,000 was purchased on same date. Depreciation was provided annually on 31st December at the rate of 10% on written down value method. Prepare machinery account from 2017 to 2019.

The solution of Question 19 Chapter 11 – Unimax Publications of Class 11

Dr.	Machine A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
01/01/17	To Bank A/c		6,00,000	31/12/17	By Deprecation A/c		70,000
01/07/17	To Bank A/c		2,00,000	31/12/17	By Balance C/d		7,30,000
			8,00,000				8,00,000
01/01/18	To Balance b/d		7,30,000	31/12/18	By Deprecation A/c		73,000
				31/12/18	By Balance C/d		6,57,000
			7,30,000				7,30,000
01/01/19	To Balance b/d		6,57,000	31/10/19	By Bank A/c		2,86,000
				31/10/19	By Profit & Loss A/c		1,75,700
				31/10/19	By Deprecation A/c		24,300
				31/12/19	By Deprecation A/c		37,100
				31/12/19	By Balance C/d		5,33,900
			10,57,000				10,57,000

Working Note:
Original cost of machinery	6,00,000
Less depreciations (60,000+54,000+24,300)	1,38,300
Market value	4,61,700
Sales value	2,86,000
Loss on sale	1,75,700