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Question No 33 Chapter No 13
WDV Method and Partial Sale
33. Sunrise Ltd. Had purchased machinery on 1st April, 2016 for Rs 5,00,000. on 1st April 2018, the company sold a part of machinery bought on 1st April, 2016 costing Rs 1,00,000 for Rs 80,000 and selling expenses amounting to Rs 2,000. Subsequently, on 1st October, in the same year, the company bought new machinery for Rs 58,000. installation charges incurred were Rs 2,000. the company depreciation @10% per annum on Diminishing Balance Method and the accounts are closed on 31st March each year Show the machinery account are closed for the period of 2016-17 to 2018-19
The solution of Question No 33 Chapter No 13:-
| Dr. | Machinery A/c | Cr. | |||||
| Date | Particulars |
J.F. | Amount | Date | Particulars |
J.F. | Amount |
|---|---|---|---|---|---|---|---|
| 01/04/16 | To Bank A/c | 5,00,000 | 31/03/17 | By Deprecation A/c*1 | 50,000 | ||
| 31/03/17 | By Balance C/d | 4,50,000 | |||||
| 5,00,000 | 5,00,000 | ||||||
| 01/04/17 | To Balance b/d | 4,50,000 | 31/03/18 | By Depreciation A/c*2 | 45,000 | ||
| 31/03/18 | By Balance C/d | 4,05,000 | |||||
| 4,50,000 | 4,50,000 | ||||||
| 01/04/18 | To Balance b/d | 4,05,000 | 01/04/18 | By Bank A/c | 78,000 | ||
| 01/10/18 | To Bank A/c | 60,000 | 01/04/18 | By Profit/Loss A/c | 3,000 | ||
| 31/03/18 | By Depreciation A/c*3 | 35,400 | |||||
| 31/03/18 | By Balance C/d | 3,48,600 | |||||
| 4,65,000 | 4,65,000 | ||||||
Working note:-
*1:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Machinery purchased on 1st April 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 5,00,000
Rate of Depreciation = 10%
Period = from 01/04/2016 to 31/03/2017 i.e.12 months
(from the date of purchase/Beginning balance to end of the financial year)
= 5,00,000 X 10/100 X 9/ 12
Depreciation = 50,000
Total Depreciation for the year = 50,000
*2:- Calculation of the amount of Depreciation on furniture for the year 2017-18
Machinery purchased on 1st April 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 4,50,000
Rate of Depreciation = 10%
Period = from 01/04/2016 to 31/03/2017 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 4,50,000 X 10/100 X 12/ 12
Depreciation = 45,000
Total Depreciation for the year = 45,000
| Statement Showing profit or loss on the sale of Machinery | |
| Particulars |
Amount |
|---|---|
| Purchase value of machinery as on 1st July, 2016 | 1,00,000 |
| Less: - Amount of Depreciation charged on the year 2016-17 | |
| 1,00,000 *10%* 12/12 | 10,000 |
| Amount of Depreciation charged on year 2017-18 | |
| 18,500 *10%* 12/12 | 9,000 |
| Book value of the asset as on 1st April 2018 | 81,000 |
| Add: - Selling expenses | 2,000 |
| Sale Price of Machinery | 80,000 |
| Profit on the sale of the asset | 3,000 |
*3:- Calculation of the amount of Depreciation on furniture for the year 2018-19
Machinery purchased on 1st April 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 3,24,000
Rate of Depreciation = 10%
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)
= 3,24,000 X 10/100 X 12/ 12
Depreciation = 32,400
Machinery purchased on 1st Oct 2018
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 60,000
Rate of Depreciation = 10%
Period = from 01/10/2018 to 31/03/2019 i.e. 6 months
(from the date of purchase/Beginning balance to end of the financial year)
= 60,000 X 10/100 X 6/ 12
Depreciation = 3,000
Total Depreciation for the year = 3,000
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Also, Check out the solved question of all Chapters: –
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)
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "Question No 33 Chapter No 13 - USHA Publication 11 Class", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to USHA Publication +1 Elements of Book-Keeping.
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28 November 2021
30 November 2021
