Question 20 Chapter 8 -Unimax Publication Class 12 Part 2

Question 20 Chapter 8 – Unimax Publication Class 12 Part 2 – 2021

Table of Contents

The solution of Question 20 Chapter 8 – Unimax Publication Class 12 Part 2-2021 : –

Unimax Publication – Accountancy PSEB Class 12 – Volume I – Solution

Unimax Publication – Accountancy PSEB (Class 12) – Part – II – Solution

20.the balance in equipment account and accumulated depreciation account as on march 31,2021 and 2022 are given below:

Balance as at	March 31,2021	March 31,2022
Equipment	65,00,000	78,70,000
Accumulated depreciation	10,80,000	16,32,000

The equipment costing 12,30,000 accumulated depreciations thereon 7,18,000 was sold for 4,68,000.
Required:
(i) Compute the amount of equipment purchased, depreciation charged for the year and loss on sale of equipment.
(ii) How each of the item related to the equipment will be reported in statement of cash flow.

The solution of Question 20 Chapter 8 – Unimax Publication Class 12 Part 2-2021 : –

Equipment Account

Particulars	₹	Particulars	₹
To balance b/d	6,50,0000	By bank A/c (in flow) (sale)	4,68,000
To bank A/c (out flow)	2,60,0000	By accumulated depreciation A/c	7,18,000
(Balancing figure)		(dep. on equipment sold)
(Equipment purchased)		By profit and A/c	44,000
		(Loss and sale of equipment
		by balance c/d	78,70,000
	91,00,000		91,00,000

Accumulated depreciation a/c

Particulars	₹	Particulars	₹
To equipment A/c	7,18,000	By balance b/d	10,80,000
(dep. on equipment sold)
To balance c/d	16,32,000	By profit and loss, A/c (B.F)	12,70,000
	23,50,000		23,50,000

Amount of equipment purchased = 26,00,000
Treatment of items:
(a) Purchased of equipment 26,00,000 as cash used for investing activities
(b) 12,70,000 depreciations charged will be added to net profit for computing cash flow from operating activities.
(c) Loss on sale of equipment 44,000 will be added to net profit for competing cash flow from operating activities.
(d) Cash from sale of equipment 4,68,000 is used investing activities.
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