Question No 06 Chapter No 13 – USHA Publication 11 Class

Question No 06 Chapter No 13

Calculation of Rate of Depreciation in the Straight Line Method

6. Sanjay Sharma purchased office equipment for Rs 1,07,000 on 1st April 2014 and spent Rs 3,000 on its freight. The life of the estimated as 20 years, when it will be sold for Rs 10,000
Calculate the rate of Depreciation per annum and prepare offices equipment accounts for the first four years. Books are closed on 31st March every year

The solution of Question No 06 Chapter No 13:-

The method of calculating the Deprecation rate:

 Amount of Depreciation = Cost of assets- Estimated Realizable or Scrap value Number of years of expected useful life

Cost of assets = Cost of Office equipment + Freight charges = 1,07,000 + 3,000 = 10,000
Number of years of expected useful life = 20 years
Estimated Retaliated or Scrap value = 10,000

 Amount of Depreciation = 1,10,000 – 10,000 = 5,000 20

Rate of Depreciation = 5,000 / 1,10,000 X 100 = 5%

 Dr. Machine A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 01/04/14 To Cash A/c 1,10,000 31/03/15 By Deprecation A/c 5,000 31/03/15 By Balance C/d 1,05,000 1,10,000 1,10,000 01/03/16 To Balance b/d 1,05,000 31/03/17 By Deprecation A/c 5,000 31/03/17 By Balance C/d 1,00,000 1,05,000 1,05,000 01/03/17 To Balance b/d 1,00,000 31/03/18 By Deprecation A/c 5,000 31/03/18 By Balance C/d 95,000 1,00,000 1,00,000 01/04/18 To Balance b/d 95,000 31/03/19 By Deprecation A/c 5,000 31/03/19 By Balance C/d 90,000 95,000 95,000

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)