Question No 07 Chapter No 13 – USHA Publication 11 Class

Question No 07 Chapter No 13

Question No 07 Chapter No 13

Addition to Assets

7. Panch Rattan Processors purchased machinery at a cost of Rs 4,60,000 on 1st January 2017 and incurred Rs 40,000 expenses on its purchase and installation. On 1st October 2017, straight-line method id 10%p.a. the firm closes its books on 31st March each year.
Write up machinery account and depreciation account for the years 2016-17, 2017-18 and 2018-19

 

The solution of Question No 07 Chapter No 13:-  

 

Dr. Machine A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/01/16 To Cash A/c   5,00,000 31/03/17 By Deprecation A/c*1   12,500
        31/03/17 By Balance C/d   4,87,500
      5,00,000       5,00,000
01/03/17 To Balance b/d   4,87,500 31/03/18 By Deprecation A/c*2   60,000
01/10/17 To Cash A/c   2,00,000 31/03/18 By Balance C/d   6,27,500
      6,87,500       6,87,500
01/03/18 To Balance b/d   6,27,500
31/03/19 By Deprecation A/c   70,000
        31/03/19 By Balance C/d   5,57,500
      6,27,500       6,27,500

 

Dr. Depreciation A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
31/03/17 To Plant A/c   12,500        
        31/03/17 By Profit & Loss A/c   12,500
      12,500       12,500
31/03/18 To Plant A/c   60,000        
        31/03/18 By Profit & Loss A/c   60,000
      60,000       60,000
31/03/19 To Plant A/c   70,000        
        31/03/19 By Profit & Loss 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 January 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 5,00,000
Rate of Depreciation = 10%
Period = from 01/01/2017 to 31/03/2017 i.e.3 months
(from the date of purchase/Beginning balance to the end of the financial year)
=5,00,000 X10/100 X 3 / 12
Depreciation = 12,500
Total Depreciation for the year = 12,500

*2:- Calculation of amount of Depreciation on furniture for year 2015-16

Machinery purchased on 1st January 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 5,00,000
Rate of Depreciation = 10%
Period = from 01/01/2017 to 31/03/2017 i.e.3 months
(from the date of purchase/Beginning balance to end of the financial year)
=5,00,000 X10/100 X 3 / 12
Depreciation = 50,000
Machinery purchased on 1st October 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,00,000
Rate of Depreciation = 10%
Period = from 01/01/2017 to 31/03/2017 i.e.3 months
(from the date of purchase/Beginning balance to end of the financial year)
= 2,00,000 X10/100 X 6 / 12
Depreciation = 10,000
Total Depreciation for the year =60,000

 

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)

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