Question No 23 Chapter No 13 - USHA Publication 11 Class

Question No 23 Chapter No 13

Depreciation on Written Down Value

23. On 1st April 2015, Bhola Nath & Sons purchased a machine costing Rs 1,00,000. its working life is 10 years. It has ben decided to depreciate it at rate of 20% p.a. on the diminishing balance method. Show the machinery Account for first three years, Books are closed on 31st March each year.

The solution of Question No 23 Chapter No 13:-  

Dr.	Machine A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
01/04/15	To Cash A/c		1,00,000	31/03/16	By Deprecation A/c*1		20,000
				31/03/16	By Balance C/d		80,000
			1,00,000				1,00,000
01/04/16	To Balance b/d		80,000	31/03/17	By Depreciation A/c*2		16,000
				31/03/17	By Balance C/d		64,000
			80,000				80,000
01/04/17	To Balance b/d		64,000	31/03/18	By Deprecation A/c*3		12,800
				31/03/19	By Balance C/d		51,200
			64,000				64,000

 

Working note:-

*1:- Calculation of the amount of Depreciation on furniture for the year 2015-16
Machinery purchased on 1st Apr 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,00,000
Rate of Depreciation = 20%
Period = from 01/04/2015 to 31/03/2016 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 1,00,000 X 20/100 X 12/ 12
Depreciation = 20,000
Total Depreciation for the year = 20,000

*2:- Calculation of the amount of Depreciation on furniture for year 2016-17
Machinery purchased on 1st Apr 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 80,000
Rate of Depreciation = 20%
Period = from 01/10/2016 to 31/03/2017 i.e. 6 months
(from the date of purchase/Beginning balance to end of the financial year)
= 80,000 X 20/100 X 12/ 12
Depreciation = 16,000
Total Depreciation for the year = 16,000

*3:- Calculation of the amount of Depreciation on furniture for the year 2018-19
Machinery purchased on 1st Apr 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 64,000
Rate of Depreciation = 20%
Period = from 01/04/2017 to 31/03/2018 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 64,000 X 10/100 X 12/ 12
Depreciation = 12,800
Total Depreciation for the year = 12,800

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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)