Question No 04 Chapter No 13
Rate of Depreciation is given
4. A company purchased a plant for Rs 1st April,2015. It further spends Rs 1,000 on its installation. It was put into use from 1st August,2015.You are required to draw the following ledger accounts for the first four years when the rate of depreciation is 10%p.a. on straight-line method and books are closed on 31st March every year:
(i) Plant Account and (ii) Depreciation Account
The solution of Question No 04 Chapter No 13:-
The method of calculating the Deprecation rate:
| Amount of Depreciation | = | Cost of Machinery / Rate of Depreciation |
| = | 8,100/ 10 X 100 | |
| = | 8,100 |
| Dr. | Plant A/c | Cr. | |||||
| Date | Particulars |
J.F. | Amount | Date | Particulars |
J.F. | Amount |
| 01/04/15 | To Cash A/c | 81,000 | 31/03/16 | By Deprecation A/c*1 | 8,100 | ||
| 31/03/16 | By Balance C/d | 75,600 | |||||
| 81,000 | 81,000 | ||||||
| 01/03/16 | To Balance b/d | 75,600 | 31/03/17 | By Deprecation A/c | 8,100 | ||
| 31/03/17 | By Balance C/d | 67,500 | |||||
| 75,600 | 75,600 | ||||||
| 01/03/17 | To Balance b/d | 67,500 |
31/03/18 | By Deprecation A/c | 8,100 | ||
| 31/03/18 | By Balance C/d | 59,400 |
|||||
| 67,500 | 67,500 | ||||||
| 01/04/18 | To Balance b/d | 59,400 | 31/03/19 | By Deprecation A/c | 8,100 | ||
| 31/03/19 | By Balance C/d | 51,300 | |||||
| 59,400 | 59,400 | ||||||
| Dr. | Deprecation A/c | Cr. | |||||
| Date | Particulars |
J.F. | Amount | Date | Particulars |
J.F. | Amount |
| 31/03/16 | To Cash A/c | 5,400 | |||||
| 31/03/16 | By Profit & Loss A/c | 5,400 | |||||
| 5,400 | 5,400 | ||||||
| 31/03/17 | To Balance b/d | 8,100 | |||||
| 31/03/17 | By Profit & Loss A/c | 8,100 | |||||
| 8,100 | 8,100 | ||||||
| 31/03/18 | To Balance b/d | 8,100 | |||||
| 31/03/18 | By Profit & Loss A/c | 8,100 | |||||
| 8,100 | 8,100 | ||||||
| 31/03/19 | To Balance b/d | 8,100 | |||||
| 31/03/19 | By Profit & Loss A/c | 8,100 | |||||
| 8,100 | 8,100 | ||||||
Working note:-
*1:- Calculation of the amount of Depreciation on furniture for the year 2015-16
The plant put in use on 1st August 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 81,000
Rate of Depreciation = 10%
Period = from 01/08/2015 to 31/03/2016 i.e.8months
(from the date of purchase/Beginning balance to the end of the financial year)
=81,000 X10/100 X 8 / 12
Depreciation = 5,400
Total Depreciation for the year = 5,400
Depreciation | Meaning | Methods | Examples
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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
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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)