Question No 13 Chapter No 14
13. A firm purchased a second- hand machine on 1st April 2015 and paid 1,40,000 for it. It spent on its overhauling and installation Rs 20,000. on 1st October 2015, another machine costing Rs 80,000 was purchased. On 1st October 2017, the machine purchased on 1st April 2015 was disposed of for Rs 1,04,000, charging CGST and SGST @6% each and new machine costing Rs 2,00,000 was installed, paying CGST and SGST @6% each. Deprecation as provided @10%p.a. by the Straight Line method. Give the Machinery Account and Deprecation Account for the 3 years. Firm ‘s books are closed on 31st March every year.
The solution of Question No 13 Chapter No 14: -
| Dr. | Machine A/c | Cr. | |||||
| Date | Particulars |
J.F. | Amount | Date | Particulars |
J.F. | Amount |
|---|---|---|---|---|---|---|---|
| 01/04/15 | To Cash A/c | 1,60,000 | 31/03/16 | By Deprecation A/c *1 | 20,000 | ||
| 01/10/15 | To Cash A/c | 80,000 | 31/03/16 | By Balance C/d | 2,20,000 | ||
| 2,40,000 | 2,40,000 | ||||||
| 01/04/16 | To Balance b/d | 2,20,000 | 31/03/17 | By Deprecation A/c | 24,000 | ||
| 31/03/17 | By Balance C/d | 1,96,000 |
|||||
| 2,20,000 | 2,20,000 | ||||||
| 01/04/17 | To Balance b/d | 1,96,000 | 01/10/17 | By Cash A/c | 1,04,000 | ||
| 01/10/17 | To Cash A/c | 2,00,000 | 01/10/17 | By Deprecation A/c | 8,000 | ||
| 01/10/17 | By loss on the sale of plant A/c | 16,000 | |||||
| 31/03/18 | By Deprecation A/c | 18,000 | |||||
| 31/03/18 | By Balance C/d | 2,50,000 | |||||
| 3,96,000 |
3,96,000 | ||||||
| Dr. | Depreciation A/c | Cr. | |||||
| Date | Particulars |
J.F. | Amount | Date | Particulars |
J.F. | Amount |
|---|---|---|---|---|---|---|---|
| 31/06/16 | To Machinery A/c | 20,000 | |||||
| 31/03/16 | By Profit and Loss A/c | 20,000 | |||||
| 20,000 | 20,000 | ||||||
| 31/03/17 | To Machinery A/c | 24,000 | |||||
| 31/03/17 | By Profit and Loss A/c | 24,000 |
|||||
| 24,000 | 24,000 | ||||||
| 01/10/17 | To Machinery A/c | 8,000 | |||||
| 31/03/18 | To Machinery A/c | 18,000 | |||||
| 31/03/18 | By Profit and Loss A/c | 26,000 | |||||
| 26,000 |
26,000 | ||||||
Working note:-
*1:- Calculation of the amount of Depreciation on machinery for F/Y 2015-16
Purchased on 1st April 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,60,000
Rate of Depreciation = 10%
Period = from 01/04/15 to 31/03/16 i.e. 9 months
(from the date of purchase/Beginning balance to the end of the financial year)
=1,60,000 X 10/100 X 12/12
Depreciation =16,000
Purchased 1st October 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 80,000
Rate of Depreciation = 10%
Period = from 01/10/15 to 31/03/16 i.e. 6 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 80,000 X 10/100 X 6/12
Depreciation = 4,000
Total Depreciation for the finical year 2014-15 =20,000
*2:- Calculation of the amount of Depreciation on machinery for F/Y 2017-18
Purchased on 1st October 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 80,000
Rate of Depreciation = 10%
Period = from 01/04/17 to 31/03/18 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
=80,000 X 10/100 X 12/12
Depreciation =8,000
Purchased 1st October 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,00,000
Rate of Depreciation = 10%
Period = from 01/10/15 to 31/03/16 i.e. 6 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 2,00,000 X 10/100 X 6/12
Depreciation = 10,000
Total Depreciation for the finical year 2017-18= 18,000
One –third of the plant was sold
| Statement Showing profit or loss on the sale of Machinery | Cr. |
| Particulars |
Amount |
|---|---|
| Book value of machinery as on 1st April 2015 when it was purchased | 1,60,000 |
| Less: - Amount of Depreciation charged on the year 2015-16 | |
| 1,60,000*10%*12/12 | 16,000 |
| Amount of Depreciation charged on the year 2016-17 | 16,000 |
| Amount of Depreciation charged on the year 2017-18 | |
| 1,60,000*10%*6/12 | 8,000 |
| Sale Price of Machinery | 1,04,000 |
| Loss on the sale of the asset | 16,000 |
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