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Question No 08 Chapter No 13
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Addition to Assets
8. On 1st April 2017, Dalip Pandey purchased a building for Rs 5,00,000. the extension in the building was done at cost of Rs 1,00,000 on 1st January 2019. the building was further extended on 1st July 2019 at cost of Rs 2,00,000
Prepare Building account for the first three years when depreciation is charged @6%p.a. on straight-line method and books are closed on 31st March every year
The solution of Question No 08 Chapter No 13:-
| Dr. | Machine A/c | Cr. | |||||
| Date | Particulars | J.F. | Amount | Date | Particulars | J.F. | Amount |
| 01/01/17 | To Cash A/c | 5,00,000 | 31/03/18 | By Deprecation A/c | 30,000 | ||
| 31/03/18 | By Balance C/d | 4,70,000 | |||||
| 5,00,000 | 5,00,000 | ||||||
| 01/03/18 | To Balance b/d | 4,70,000 | 31/03/19 | By Deprecation A/c*1 | 31,500 | ||
| 01/01/19 | To Cash A/c | 1,00,000 | 31/03/19 | By Balance C/d | 5,38,500 | ||
| 5,70,000 | 5,70,000 | ||||||
| 01/03/19 | To Balance b/d | 5,38,500 | 31/03/20 | By Deprecation A/c*2 | 45,000 | ||
| 01/07/19 | To Cash A/c | 2,00,000 | 31/03/20 | By Balance C/d | 6,93,500 | ||
| 7,38,500 | 7,38,500 | ||||||
| Dr. | Depreciation A/c | Cr. | |||||
| Date | Particulars | J.F. | Amount | Date | Particulars | J.F. | Amount |
| 31/03/18 | To Plant A/c | 30,000 | |||||
| 31/03/18 | By Profit & Loss A/c | 30,000 | |||||
| 30,000 | 30,000 | ||||||
| 31/03/19 | To Plant A/c | 31,500 | |||||
| 31/03/19 | By Profit & Loss A/c | 31,500 | |||||
| 31,500 | 31,500 | ||||||
| 31/03/20 | To Plant A/c | 45,000 | |||||
| 31/03/20 | By Profit & Loss A/c | 45,000 | |||||
| 45,000 | 45,000 | ||||||
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Working note:-
*1:- Calculation of the amount of Depreciation on furniture for the year 2018-19
Machinery purchased on 1st April 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 5,00,000
Rate of Depreciation = 6%
Period = from 01/01/2018 to 31/03/2019 i.e. 12 months
(from the date of purchase/Beginning balance to end of the financial year)
=5,00,000 X6/100 X 12 / 12
Depreciation = 30,000
Machinery purchased on 1st January 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,00,000
Rate of Depreciation = 6%
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)
= 1,00,000 X 6/100 X 3 / 12
Depreciation = 1,500
Total Depreciation for the year = 31,500
*2:- Calculation of amount of Depreciation on furniture for year 2019-20
Machinery purchased on 1st April 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 5,00,000
Rate of Depreciation = 6%
Period = from 01/04/2019 to 31/03/2020 i.e. 12 months
(from the date of purchase/Beginning balance to end of the financial year)
=5,00,000 X6/100 X 12 / 12
Depreciation = 30,000
Machinery purchased on 1st January 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,00,000
Rate of Depreciation = 6%
Period = from 01/04/2019 to 31/03/2020 i.e.12 months
(from the date of purchase/Beginning balance to end of the financial year)
= 1,00,000 X 6/100 X 6 / 12
Depreciation = 6,000
Machinery purchased on 1st July 2019
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,00,000
Rate of Depreciation = 6%
Period = from 01/07/2019 to 31/03/2020 i.e.9 months
(from the date of purchase/Beginning balance to end of the financial year)
=2,00,000 X6/100 X 9 / 12
Depreciation = 9,000
Total Depreciation for the year = 45,000
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
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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
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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)