Question No 18 Chapter No 13 - USHA Publication 11 Class

Question No 18 Chapter No 13

Sale of Total Assets

18. Majha Transport company purchased 5 trucks at Rs 50,000 each on 1st July,2015. the company writes off depreciation @20% p.a. on original cost and observe financial years as it its accounting years.
On 1st January, 2018, one of the trucks met with an accident and is completely destroyed. Insurance company paid Rs 22,500 in full settlement of the claim. On the same day, the company purchased another truck for Rs 25,000 and spent Rs 5,000 o its overhauling.
Prepare Truck Account for 3 years ending 31st March,2018

The solution of Question No 18 Chapter No 13:-  

Dr.	Truck A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
01/07/15	To Cash A/c		2,50,000	31/03/16	By Deprecation A/c*1		37,500
				31/03/16	By Balance C/d		2,12,500
			2,50,000				2,50,000
01/04/16	To Balance b/d		2,12,500	31/03/17	By Deprecation A/c*2		50,000
				31/03/17	By Balance C/d		1,62,500
			2,12,500				2,12,500
01/04/17	To Balance b/d		1,62,500	01/01/18	By Bank A/c		22,500
01/01/18	To Profit/loss A/c		30,000	01/01/18	By Profit/Loss A/c		2,500
				01/01/18	By Deprecation A/c		7,500
				31/03/18	By Deprecation A/c*3		41,500
				31/03/18	By Balance C/d		1,18,500
			1,92,500				1,92,500

Working note:-

*1:- Calculation of the amount of Depreciation on furniture for the year 2015-16
Machinery purchased on 1st Jul 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,50,000
Rate of Depreciation = 20%
Period = from 01/07/2015 to 31/03/2016 i.e. 9 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 2,50,000 X 20/100 X 9/ 12
Depreciation = 37,500
Total Depreciation for the year = 37,500

*2:- Calculation of the amount of Depreciation on furniture for year 2016-17
Machinery purchased on 1st Jul 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,50,000
Rate of Depreciation = 20%
Period = from 01/04/2016 to 31/03/2017 i.e. 9 months
(from the date of purchase/Beginning balance to end of the financial year)
= 2,50,000 X 20/100 X 9/ 12
Depreciation = 50,000
Total Depreciation for the year  50,000

Statement Showing profit or loss on the sale of Machinery
Particulars	Amount
Purchase value of machinery as on 1st July, 2015	50,000
Less: - Amount of Depreciation charged on year 2015-16
50,000*10%* 9/12	7,500
Amount of Depreciation charged on year 2016-17
50,000*10%* 12/12	10,000
Amount of Depreciation charged on year 2017-18
50,000*10%* 9/12	7,500
Book value of the asset as on 1st January 2019	25,000
Sale Price of Machinery	22,500
Loss on the sale of the asset	2,500

*3:- Calculation of the amount of Depreciation on furniture for the year 2017-18
Machinery purchased on 1st Jul 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,00,000
Rate of Depreciation = 20%
Period = from 01/04/2017 to 31/10/2018 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 2,00,000 X 20/100 X 12/ 12
Depreciation = 40,000
Machinery purchased on 1st October 2016
Value of Asset = 25,000
Rate of Depreciation = 20%
Period = from 01/01/2017 to 31/03/2017 i.e. 3 months
(from the date of purchase/Beginning balance to end of the financial year)
= 25,000 X 20/100 X 3/ 12
Depreciation =1.250
Total Depreciation for the year = 41,250

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Also, Check out the solved question of all Chapters: –

Chapter No. 1 - Introduction

Chapter No. 2 - Theory Base of Accounting 

Chapter No. 3 - Vouchers and transactions

Chapter No. 4 - Journal

Chapter No. 5 - Ledger

Chapter No. 6 - Cash Book

Chapter No. 7 - Other Subsidiary Books

Chapter No. 8 - Journal Proper

Chapter No. 9 - Trial Balance 

Chapter No. 10 - Bank Reconciliation Statement

Chapter No. 11 - Depreciation

Chapter No. 12 - Provisions and Reserves 

Chapter No. 13 - Bills of Exchange

Chapter No. 14 - Rectification of Errors 

Chapter No. 15 - Financial Statements - (Without Adjustments)

Chapter No. 16 - Financial Statements - (With Adjustments)