Question No 42 Chapter No 13 – USHA Publication 11 Class

Question No 42 Chapter No 13

Question No 42 Chapter No 13

Creation of Provision for Depreciation Account

42. The following balance appears in the books of Rohit Thakur

April.1 2018 Machinery Account 4,00,000
  Provision for Depreciation 1,20,000

On April 1, 2018, Rohit Thakur sold machinery for Rs 44,000 which was purchased on 1st April 2015 for Rs 90,000
Prepare Machinery Account, Provision for Depreciation and Machinery Disposal Account for the years 2018-19, assuming 10% p.a. depreciation on Straight-line method.

The solution of Question No 42 Chapter No 13:-  

Dr. Machinery A/c Cr.
Dat Particulars
J.F. Amount Date Particulars
J.F. Amount
01/04/18 To Balance b/f   4,00,000 01/04/19 By Machinery Disposal A/c   90,000
        01/04/19 By Balance C/d
  4,10,000
      4,00,000       4,00,000

 

Dr. Provision for Depreciation A/c Cr.
Dat Particulars
J.F. Amount Date Particulars
J.F. Amount
31/03/17 To Machinery Disposal A/c   27,000 01/04/18 By Balance b/f   1,20,000
31/03/19 To Balance c/d   1,24,000 31/03/19 By Depreciation A/c   31,000
      1,51,000       1,51,000

 

Dr. Machinery Disposal A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
        01/04/18 By Balance b/f   44,000
        01/04/18 By Provision for Dep. A/c   27,000
        01/04/18 By Profit/Loss A/c   19,000
01/04/18 To Machinery A/c   90,000        
      90,000       90,000

Note: The answer given in the book is wrong and the correct answer is Rs 19,000 as we have been shown in the above answer.


Working note:-

Statement Showing profit or loss on the sale of Machinery  
Particulars
Amount
Purchase value of Equipment as on 1st Apr, 2015 50,000
Less: – Amount of Depreciation charged on the year 2015-16  
90,000 *10%* 12/12 9,000
Amount of Depreciation charged on the year 2016-17  
90,000 *10%* 12/12 9,000
Amount of Depreciation charged on the year 2017-18  
90,000 *10%* 12/12 9,000
Book value of the asset as on 31st March 2018 63,000
Sale Price of Machinery 44,000
Loss on the sale of the asset 19,000

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Depreciation | Meaning | Methods | Examples

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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)

Question No 41 Chapter No 13 – USHA Publication 11 Class

Question No 41 Chapter No 13

Question No 41 Chapter No 13

Creation of Provision for Depreciation Account

41. On 1st April 2017 Hem Lata purchased 4 machineries for Rs 50,000 each. On 31st March 2019, one machinery was sold for Rs 41,000. depreciation was charged @10% p.a. on the straight-line method
Prepare Machinery account, Machinery Disposal Account and Provision for depreciation Account for 2 years. The account is closed on 31st March every year

The solution of Question No 41 Chapter No 13:-  

Dr. Machinery A/c Cr.
Dat Particulars
J.F. Amount Date Particulars
J.F. Amount
01/03/17 To Balance b/f   2,00,000        
        31/03/18 By Balance C/d   2,00,000
      2,00,000       2,00,000
01/04/18 To Balance b/f   2,00,000 01/03/19 By Machinery Disposal A/c   50,000
        01/04/19 By Balance C/d
  1,50,000
      2,00,000       2,00,000

 

Dr. Provision for Depreciation A/c Cr.
Dat Particulars
J.F. Amount Date Particulars
J.F. Amount
        01/04/018 By Depreciation A/c   20,000
01/04/018 To Balance c/d   20,000        
      20,000       20,000
31/03/19 To Machinery Disposal A/c   10,000 01/03/18 By Balance b/f   20,000
31/03/19 To Balance c/d   30,000 31/03/19 By Depreciation A/c   20,000
      40,000       40,000

 

Dr. Machinery Disposal A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
        01/03/19 By Balance b/f   41,000
        01/03/19 By Provision for Dep. A/c   10,000
31/03/19 To Machinery A/c   50,000        
31/03/19 To Profit/Loss A/c   1,000        
      51,000       51,000

 


Working note:-

Statement Showing profit or loss on the sale of Machinery  
Particulars
Amount
Purchase value of Equipment as on 1st Apr, 2017 50,000
Less: – Amount of Depreciation charged on the year 2017-18  
50,000 *10%* 12/12 5,000
Amount of Depreciation charged on the year 2018-19  
50,000 *10%* 12/12 5,000
Book value of the asset as on 1st March 2018 40,000
Sale Price of Machinery 41,000
Profit on the sale of the asset 1,000

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Depreciation | Meaning | Methods | Examples

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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)

Question No 40 Chapter No 13 – USHA Publication 11 Class

Question No 40 Chapter No 13

Question No 40 Chapter No 13

Creation of Provision for Depreciation Account

40. The following balances appear in the books of Jain Mills:

     
April.1 2018 Machinery Account Rs 80,000
  Provision for Depreciation Rs 30,000

On April 1, 2018 they decided to sell machinery for Rs 8,350. this machine was purchased for Rs 16,000 on 1st April 2014.
You are required to prepare Machinery Account and provision for depreciation Account for the year 2018-19, assuming the firm has been charging depreciation at 10% p.a. on original cost method

The solution of Question No 40 Chapter No 13:-  

Dr. Machinery A/c Cr.
Dat Particulars
J.F. Amount Date Particulars
J.F. Amount
01/03/18 To Balance b/f   80,000 01/03/18 By Machinery Disposal A/c   16,000
        31/03/19 By Balance C/d   64,000
      80,000       80,000

 

Dr. Provision for Depreciation A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/03/18 To Machinery Disposal A/c   6,400 01/03/18 By Balance b/f   30,000
31/03/19 To Balance c/d   30,000 31/03/19 By Depreciation A/c   6,400
      36,400       36,400

 

Dr. Machinery Disposal A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
        01/03/18 By Balance b/f   8,350
        01/03/18 By Provision for Dep. A/c   6,400
        01/03/18 By Profit/Loss A/c   1,250
31/03/19 To Balance c/d   16,000        
      16,000       16,000

 


Working note:-

Statement Showing profit or loss on the sale of Machinery  
Particulars
Amount
Purchase value of Equipment as on 1st Apr, 2014 16,000
Less: – Amount of Depreciation charged on the year 2014-15  
16,000 *10%* 12/12 1,600
Amount of Depreciation charged on the year 2015-16  
16,000 *10%* 12/12 1,600
Amount of Depreciation charged on the year 2016-17  
16,000 *10%* 12/12 1,600
 Amount of Depreciation charged on the year 2017-18  
16,000 *10%* 12/12 1,600
Book value of the asset as on 1st March 2018 9,600
Sale Price of Machinery 8,350
Loss on the sale of the asset 1,250

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Depreciation | Meaning | Methods | Examples

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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)

Question No 39 Chapter No 13 – USHA Publication 11 Class

Question No 39 Chapter No 13

Question No 39 Chapter No 13

Creation of Provision for Depreciation Account

39. Nagina purchased machinery for Rs 60,000 on 1st October 2015. Another machinery was purchased on 1st July 2016 for Rs 40,000. Machinery purchased on 1st October 2015 was sold Rs 34,000 on 31st March 2018
Prepare Machinery account and Provision for Depreciation Account for 3 accounting years when depreciation is charged @10% p.a. on straight line Method and books are closed on 31st March every year

The solution of Question No 39 Chapter No 13:-  

Dr. Machinery A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/10/15 To Bank A/c   60,000        
        31/03/16 By Balance C/d   60,000
      60,000       60,000
01/04/16 To Balance b/d   60,000        
01/07/16 To Bank A/c   40,000 31/03/18 By Balance C/d   1,00,000
      1,00,000       1,00,000
01/04/17 To Balance b/f   1,00,000 01/04/18 By Bank A/c   34,000
        01/04/18 By Provision for Dep.   15,000
        01/04/18 By Profit/loss   11,000
        31/03/18 By Balance C/d   40,000
      1,00,000       1,00,000

 

Dr. Provision for Depreciation A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
        01/03/16 By Depreciation A/c*1   3,000
31/03/16 To Balance c/d   3,000        
      3,000       3,000
        01/04/16 By Balance b/f   3,000
        01/03/17 By Depreciation A/c*2   3,000
01/03/17 To Balance c/d   12,000        
      12,000       12,000
1/03/17 To Machinery A/c   12,000 01/04/17 By Balance b/f   48,600
        13/03/18 By Depreciation A/c*3   10,000
13/03/18 To Balance c/d   7,000        
      22,000       22,000

 


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 = 60,000
Rate of Depreciation = 10%
Period = from 01/10/2015 to 31/03/2016 i.e.10 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 60,000 X 10/100 X 6/ 12
Depreciation = 3,000
Total Depreciation for the year = 3,000

*2:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Machinery purchased on 1st Oct 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 60,000
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)
= 60,000 X 10/100 X 12/ 12
Depreciation = 6,000
Machinery purchased on 1st Jul 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 40,000
Rate of Depreciation = 10%
Period = from 01/07/2016 to 31/03/2017 i.e.9 months
(from the date of purchase/Beginning balance to end of the financial year)
= 40,000 X 10/100 X 9/ 12
Depreciation = 3,000
Total Depreciation for the year =9,000

*3:– Calculation of amount of Depreciation on furniture for year 2017-18
Machinery purchased on 1st Oct 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 60,000
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 end of the financial year)
= 97,200 X 10/100 X 12/ 12
Depreciation= 6,000
Machinery purchased on 1st Jul 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 40,000
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 end of the financial year)
= 40,000 X 10/100 X 12/ 12
Depreciation = 4,000
Total Depreciation for the year = 10,000

Statement Showing profit or loss on the sale of Machinery  
Particulars
Amount
Purchase value of Equipment as on 1st Oct, 2015 60,000
Less: – Amount of Depreciation charged on the year 2015-16  
60,000 *10%* 6/12 3,000
Amount of Depreciation charged on the year 2016-17  
60,0000 *10%* 12/12 6,000
 Amount of Depreciation charged on the year 2017-18  
60,000 *10%* 9/12 6,000
Book value of the asset as on 1st March 2018 45,000
Sale Price of Machinery 34,000
Loss on the sale of the asset 11,000


*3:- Calculation of the amount of Depreciation on furniture for the year 2018-19

Machinery purchased on 1st Apr 2016 ½
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 97,200
Rate of Depreciation = 10%
Period = from 01/04/2018 to 31/03/2019 i.e.12 months
(from the date of purchase/Beginning balance to end of the financial year)
= 97,200 X 10/100 X 12/ 12
Depreciation = 9,720
Machinery purchased on 1st Oct 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 57,000
Rate of Depreciation = 10%
Period = from 01/04/2018 to 31/03/2019 i.e.12 months
(from the date of purchase/Beginning balance to end of the financial year)
= 57,000 X 10/100 X 12/ 12
Depreciation = 5,700
Total Depreciation for the year = 15,420

Depreciation | Meaning | Methods | Examples

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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)

Question No 38 Chapter No 13 – USHA Publication 11 Class

Q 38 CH 13 USHA 1 Book 2020 Solution min 150x150 - Question No 38 Chapter No 13 - USHA Publication  11 Class

Question No 38 Chapter No 13

Creation of Provision for Depreciation Account

38. Ravi Kumar purchased machinery for Rs 2,00,000 on 1st April 2016. he spent Rs 40,000 on its installation. He purchased another machine for Rs 60,000 on 1st October 2017 and sold on 31st December 2018, one-half of the machinery purchased on 1st April 2016 for Rs 75,000.
Prepare Machinery Account and Provision for depreciation Account for 3 years when depreciation is charged 10% p.a. on reducing balance method and books are closed on 31st March every year.

The solution of Question No 38 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   2,40,000        
        31/03/17 By Balance C/d   2,40,000
      2,40,000       2,40,000
01/04/17 To Balance b/d   2,40,000        
01/10/17 To Bank A/c   60,000 31/03/18 By Balance C/d   3,00,000
      3,00,000       3,00,000
01/04/18 To Balance b/f   3,00,000 01/04/18 By Bank A/c   75,000
        01/04/18 By Provision for Dep.   30,090
        01/04/18 By Profit/loss   14,910
        31/03/19 By Balance C/d   1,80,000
      3,00,000       3,00,000

 

Dr. Provision for Depreciation A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
        01/03/17 By Depreciation A/c*1   24,000
31/03/16 To Balance c/d   24,000        
      24,000       24,000
        01/04/17 By Balance b/f   24,000
        01/03/18 By Depreciation A/c   24,600
01/03/18 To Balance c/d   48,600        
      48,600       48,600
1/12/18 To Machinery A/c   30,090 01/04/8 By Balance b/f   48,600
        01/12/18 By Depreciation A/c   7,290
        13/03/18 By Depreciation A/c*3   15,420
13/03/18 To Balance c/d   71,310        
      71,310       71,310

 


Working note:-

*1:- Calculation of the amount of Depreciation on furniture for the year 2015-16
Machinery purchased on 1st Apr 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,40,000
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)
= 2,40,000 X 10/100 X 12/ 12
Depreciation = 24,000
Total Depreciation for the year = 24,000

*2:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Machinery purchased on 1st Apr 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,16,000
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)
= 2,16,000 X 10/100 X 12/ 12
Depreciation = 12,600
Machinery purchased on 1st Oct 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 60,000
Rate of Depreciation = 10%
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)
= 60,000 X 10/100 X 6/ 12
Depreciation = 3,000
Total Depreciation for the year =24,600

Statement Showing profit or loss on the sale of Machinery  
Particulars
Amount
Purchase value of Equipment as on 1st Apr, 2016 ½ 1,20,000
Less: – Amount of Depreciation charged on the year 2017-18  
1,20,000 *10%* 12/12 12,000
Amount of Depreciation charged on the year 2017-18  
1,08,000 *10%* 12/12 10,800
 Amount of Depreciation charged on the year 2018-19  
97,200 *10%* 9/12 7,290
Book value of the asset as on 1st December 2018 89,910
Sale Price of Machinery 75,000
Profit on the sale of the asset 14,910


*3:- Calculation of the amount of Depreciation on furniture for the year 2018-19

Machinery purchased on 1st Apr 2016 ½
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 97,200
Rate of Depreciation = 10%
Period = from 01/04/2018 to 31/03/2019 i.e.12 months
(from the date of purchase/Beginning balance to end of the financial year)
= 97,200 X 10/100 X 12/ 12
Depreciation = 9,720
Machinery purchased on 1st Oct 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 57,000
Rate of Depreciation = 10%
Period = from 01/04/2018 to 31/03/2019 i.e.12 months
(from the date of purchase/Beginning balance to end of the financial year)
= 57,000 X 10/100 X 12/ 12
Depreciation = 5,700
Total Depreciation for the year = 15,420

Depreciation | Meaning | Methods | Examples

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Comment if you have any question.

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)

Question No 37 Chapter No 13 – USHA Publication 11 Class

Question No 37 Chapter No 13

Question No 37 Chapter No 13

Creation of Provision for Depreciation Account

37. A company purchased a second-hand plant for Rs 60,000. it immediately spends Rs 10,000 on overhauling. The plant was put to use on April 1, 2016. After having it used for two years, it was sold for Rs 50,000
You are required to Prepare plant Account and provision for depreciation account, when depreciation is charged at the rate of 10% p.a. on straight-line method and book are closed on 31st March every year.

The solution of Question No 37 Chapter No 13:-  

Dr. Surgical Equipment A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/04/16 To Bank A/c   70,000        
        31/03/17 By Balance C/d   70,000
      70,000       70,000
01/04/17 To Balance b/d   70,000        
        31/03/18 By Balance C/d   70,000
      70,000       70,000

 

Dr. Provision for Depreciation A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
        31/03/17 By Depreciation A/c*1   7,000
13/03/17 To Balance c/d   7,000        
      7,000       7,000
        01/04/17 By Balance b/f   7,000
        31/03/18 By Depreciation A/c   7,000
31/03/18 To Balance c/d   14,000        
      14,000       14,000

 

Dr. Plant Disposal A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
        31/03/19 By Bank A/c   50,000
        31/03/19 By Provision for Dep. A/c   14,000
        31/03/19 By Profit/Loss A/c   6,000
13/03/17 To Bank A/c   70,000        
      70,000       70,000


Working note:-

*1:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Machinery purchased on 1st Apr 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 70,000
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)
= 70,000 X 10/100 X 12/ 12
Depreciation = 7,000
Total Depreciation for the year = 7,000


Depreciation | Meaning | Methods | Examples

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Comment if you have any question.

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)

Question No 36 Chapter No 13 – USHA Publication 11 Class

Question No 36 Chapter No 13

Question No 36 Chapter No 13

Creation of Provision for Depreciation Account

36. Chancal Patel purchased surgical instruments for her hospital for Rs 5,00,000 on 1st July 2015. depreciation was charged @10% p.a. on straight line basis and is transferred to Accumulated Depreciation Account. She purchased another surgical instrument for Rs 1,50,000 on 1st October 2016
Prepare surgical Equipment and Provision for Depreciation Accout for the years 2015-16 to 2017-18

The solution of Question No 36 Chapter No 13:-  

Dr. Surgical Equipment A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/07/15 To Bank A/c   5,00,000        
        31/03/16 By Balance C/d   5,00,000
      5,00,000       5,00,000
01/04/16 To Balance b/d   5,00,000        
01/10/16 To Bank A/c   1,50,000 31/03/17 By Balance C/d   6,50,000
      6,50,000       6,50,000
01/04/17 To Balance b/f   6,50,000        
        31/03/18 By Balance C/d   6,50,000
      6,50,000       6,50,000

 

Dr. Provision for Depreciation A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
        01/03/16 By Depreciation A/c*1   37,500
01/03/16 To Balance c/d   37,500        
      37,500       37,500
        01/04/16 By Balance b/f   37,500
        01/03/17 By Depreciation A/c   57,500
01/03/17 To Balance c/d   95,000        
      95,000       95,000
        01/04/17 By Balance b/f   95,000
        13/03/18 By Depreciation A/c*3   65,000
13/03/18 To Balance c/d   1,60,000
       
      1,60,000
      1,60,000

 


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 = 5,00,000
Rate of Depreciation = 10%
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)
= 5,00,000 X 10/100 X 9/ 12
Depreciation = 37,500
Total Depreciation for the year = 37,500

*2:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Machinery purchased on 1st Jul 2015
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 12/ 12
Depreciation = 50,000
Machinery purchased on 1st Oct 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,50,000
Rate of Depreciation = 10%
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)
= 1,50,000 X 10/100 X 6/ 12
Depreciation = 7,500
Total Depreciation for the year = 57,500

*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 = 5,00,000
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 end of the financial year)
= 5,00,000 X 10/100 X 12/ 12
Depreciation = 50,000
Machinery purchased on 1st Oct 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,50,000
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 end of the financial year)
= 1,50,000 X 10/100 X 12/ 12
Depreciation = 15,000
Total Depreciation for the year = 65,000

Depreciation | Meaning | Methods | Examples

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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)

Question No 35 Chapter No 13 – USHA Publication 11 Class

Question No 35 Chapter No 13

Question No 35 Chapter No 13

Creation of Provision for Depreciation Account

35. Chander Mani purchased scientific instruments for Rs 3,00,000 on 1st April 2016 Depreciation was charged @10% p.a. on original cost and transferred to provision for depreciation account.Prepare Scientific Instruments Account and provision for Depreciation account for 2 years when books are closed on 31st March every year.

The solution of Question No 35 Chapter No 13:-  

Dr. Scientific Instruments A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/04/16 To Bank A/c   3,00,000        
        31/03/17 By Balance C/d   3,00,000
      3,00,000       3,00,000
01/04/16 To Balance b/d   3,00,000        
        31/03/18 By Balance C/d   3,00,000
      3,00,000       3,00,000

 

Dr. Provision for Depreciation A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
        01/03/17 By Depreciation A/c*1   30,000
01/03/17 To Balance c/d   30,000        
      30,000       30,000
        01/04/17 By Balance b/f   30,000
        01/03/18 By Depreciation A/c   30,000
01/03/18 To Balance c/d   60,000        
      30,000       60,000

 


Working note:-

*1:- Calculation of the amount of Depreciation on furniture for the year 2015-16
Machinery purchased on 1st Apr 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 3,00,000
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 the end of the financial year)
= 3,00,000 X 10/100 X 12/ 12
Depreciation = 30,000

Depreciation | Meaning | Methods | Examples

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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)

Question No 34 Chapter No 13 – USHA Publication 11 Class

Question No 34 Chapter No 13

Question No 34 Chapter No 13

WDV Method and Partial Sale

34. Jung Traders purchased an equipment on1st July 2015, for Rs 28,000 and spends Rs 2,000 for its carriage and installation. On 1st October 2015 and on 1st Jan 2016 additional equipment were bought for Rs 40,000 and 10,000 respectively. On 31st March 2017 first day. On 30th September 2018, the second equipment was taken away at home at 60% of the value of the book. On 31st March 2019 third equipment was heavily damaged and could not fetch anything. Depreciation was charged at 20% p.a. on reducing instalment basis.
Prepare Equipment Account till March 31, 2019, with all workings, financial years being followed.

The solution of Question No 34 Chapter No 13:-  

Dr. Machinery A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/07/15 To Bank A/c   30,000 31/03/16 By Deprecation A/c*1   9,000
01/10/15 To Bank A/c   40,000        
01/01/15 To Bank A/c   10,000        
        31/03/16 By Balance C/d   71,000
      80,000       80,000
01/04/16 To Balance b/d   71,000 31/03/17 By Bank A/c   20,000
01/01/17     20,000 31/03/17 By Depreciation A/c   5,100
        31/03/17 By Profit/loss A/c   400
        31/03/17 By Depreciation A/c*2   9,100
        31/03/17 By Balance C/d   56,400
      91,000       91,000
01/04/17 To Balance b/d   56,400 31/03/18 By Depreciation A/c*3   11,280
        31/03/18 By Balance C/d   45,120
      56,400       56,400
01/04/18 To Balance b/d   45,120 30/09/18 By Drawing A/c   12,442
        30/09/18 By Deprecation A/c   2,304
        30/09/18 By Profit/loss A/c   8,294
        31/03/19 By Profit/loss A/c   4,864
        31/03/19 By Deprecation A/c*4   4,416
        31/03/19 By Balance C/d
  12,800
      45,120       45,120


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 = 30,000
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 end of the financial year)
= 30,000 X 20/100 X 9/ 12
Depreciation = 4,500
Machinery purchased on 1st Oct 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 40,000
Rate of Depreciation = 20%
Period = from 01/10/2015 to 31/03/2016 i.e.6 months
(from the date of purchase/Beginning balance to end of the financial year)
= 40,000 X 20/100 X 6/ 12
Depreciation = 4,000
Machinery purchased on 1st Jan 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 10,000
Rate of Depreciation = 20%
Period = from 01/01/2015 to 31/03/2016 i.e.3 months
(from the date of purchase/Beginning balance to end of the financial year)
= 10,000 X 20/100 X 3/ 12
Depreciation = 500
Total Depreciation for the year = 9,000

Statement Showing profit or loss on the sale of Machinery  
Particulars
Amount
Purchase value of Equipment as on 1st July 2015 30,000
Less: – Amount of Depreciation charged on the year 2015-16  
30,000 *20%* 9/12 4,500
Amount of Depreciation charged on the year 2016-17  
25,500 *20%* 12/12 5,100
Book value of the asset as on 1st April 2017 20,400
Sale Price of Machinery 20,000
Loss on the sale of the asset 400

*2:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Machinery purchased on 1st Oct 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 36,000
Rate of Depreciation = 20%
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)
= 36,000 X 20/100 X 12/ 12
Depreciation = 7,200
Machinery purchased on 1st Jan 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 9,500
Rate of Depreciation = 20%
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)
= 9,500 X 20/100 X 12/ 12
Depreciation = 1,900
Total Depreciation for the year = 9,100

*3:- Calculation of the amount of Depreciation on furniture for the year 2017-18
Machinery purchased on 1st Oct 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 28,800
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 end of the financial year)
= 28,800 X 20/100 X 12/ 12
Depreciation = 5,760
Machinery purchased on 1st Jan 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 7,600
Rate of Depreciation = 20%
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)
= 9,500 X 20/100 X 12/ 12
Depreciation = 1,520
Machinery purchased on 1st March 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 20,000
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 end of the financial year)
= 20,000 X 20/100 X 12/ 12
Depreciation = 4,000
Total Depreciation for the year = 12,180

Statement Showing profit or loss on the sale of Machinery  
Particulars
Amount
Purchase value of Equipment as on 1st Oct 2015 40,000
Less: – Amount of Depreciation charged on the year 2015-16  
40,000 *20%* 6/12 4,000
Amount of Depreciation charged on the year 2016-17  
36,000 *20%* 12/12 7,200
Amount of Depreciation charged on the year 2017-18  
28,800 *20%* 12/12 5,760
Amount of Depreciation charged on the year 2018-19  
23,040 *20%* 6/12 2,304
Book value of an asset as on 30th September 2018 20,736
Sale Price of Machinery 12,442
Loss on the sale of the asset 8,294

*4:- Calculation of the amount of Depreciation on furniture for the year 2018-19
Machinery purchased on 1st Jan 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 6,080
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)
= 6,080 X 20/100 X 12/ 12
Depreciation = 1,216
Machinery purchased on 1st March 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 16,000
Rate of Depreciation = 20%
Period = from 01/04/2018 to 31/03/2019 i.e. 12 months
(from the date of purchase/Beginning balance to end of the financial year)
= 16,000 X 20/100 X 12/ 12
Depreciation = 3,200
Total Depreciation for the year = 4,416

Statement Showing profit or loss on the sale of Machinery  
Particulars
Amount
Purchase value of Equipment as on 1st Jan 2016 10,000
Less: – Amount of Depreciation charged on the year 2015-16  
10,000 *20%* 3/12 500
Amount of Depreciation charged on the year 2016-17  
9,500 *20%* 12/12 1,900
Amount of Depreciation charged on the year 2017-18  
7,600 *20%* 12/12 1,520
Amount of Depreciation charged on the year 2018-19  
6,080 *20%* 12/12 1,216
Loss on the sale of the asset 4,864

 

Depreciation | Meaning | Methods | Examples

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Comment if you have any question.

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)

Question No 33 Chapter No 13 – USHA Publication 11 Class

Question No 33 Chapter No 13

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

Depreciation | Meaning | Methods | Examples

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Comment if you have any question.

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)