Question 8 Chapter 12 – Class 11 Unimax

Question 8 Chapter 12 – Class 11 Unimax

A company decided to transfer ₹ 400 every year to repair and renewals reserve account maintained for a machine recently purchased. In the 1st 4 years, annual repairs were ₹ 50, ₹ 90, ₹ 150 and ₹ 170 respectively. Prepare repairs and renewals reserve account for these 4 years.

The solution of Question 8 Chapter 12 – Class 11 Unimax: 

Dr.	Book of company repairs and renewal reserve A/c					Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
1st year				1st year
Dec.31	To Cash A/c		50	Dec.31	By p & L A/c		400
Dec.31	To Balance c/d		350
			400				400
2nd year				2nd year
Dec.31	To Cash A/c		90	Jan.1	By Balance b/d		350
Dec.31	To Balance c/d		660	Dec.31	By P & L A/c		400
			750				750
3rd year				3rd year
Dec.31	To Cash A/c		150	Jan.1	By Balance b/d		660
Dec.31	To Balance c/d		910	Dec.31	By P & L A/c		400
			1,060				1,060
4th year				4th year
Dec.31	To cash A/c		170	Jan.1	By Balance b/d		910
Dec.31	To Balance c/d		1,140	Dec.31	By P & L A/c		400
			1,310				1,310
				5th year
				Jan.1	By balance b/d		1,140