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Question No 10 Chapter No 14 – T.S. Grewal 11 Class

Question No 10 Chapter No 14
Question No.10 - Chapter No.14- T.S. Grewal +1 Book 2019-Solution

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Question No 10 Chapter No 14

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10. On 1st April 2015, Shivam Enterprise purchased a second- hand machinery for Rs 52,000and spent Rs 2,000 on cartage, Rs 3,000 on unloading, Rs 2,000 on installation and Rs 1,000 as the brokerage of the middle man. It was estimated that the machinery will have a scrap value of Rs 6,000 at the end of its useful life, which is 10 year. On 31st December 2015, repairs and renewals amounted to Rs 2,500 were paid. On 1st October 2017, this machine was sold for Rs 30,600 and an amount of Rs 600 was paid as commission to the agent. Calculate the amount of annual depreciation and rate of depreciation. Also prepare the Machinery Account for the first 3 years, assuming that firm follows finical year for accounting.

The solution of Question No 10 Chapter No 14: –

Dr.Machine A/cCr.
DateParticulars
J.F.AmountDateParticulars
J.F.Amount
01/4/15To Cash A/c 60,00031/03/16By Deprecation A/c  5,400
    31/03/16By Balance C/d 54,600
   60,000   60,000
01/04/16To Balance b/d 54,600
31/03/17By Deprecation A/c  5,400
    31/03/17By Balance C/d 29,475
   54,600
   54,600
01/04/17To Balance b/d  49,20001/10/17By Cash A/c 30,600
    01/10/17By Deprecation A/c 2,700
    01/10/17By loss on the sale of van A/c 16,500
   49,200
   49,200


Working note:-

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

Rate of Deprecation can be calculated with the help of following formula:

Rate of Depreciation =Amount of DepreciationX100
Total Cost of Assets

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Cost of assets = Cost of Machine + cartage+ unloading + installation + brokerage of the middle man

Cost of assets = 52,000 + 2,000 + 3,000 + 2,000 + 1,000 = 60,000
Number of years of expected useful life = 10 years
Estimated Retaliated or Scrap value = 6,000

Amount of Depreciation =60,000 – 6,000= 5,400
            10

Rate of Deprecation can be calculated with the help of following formula:

Rate of Depreciation =5,400  X100
60,000

=9%

Statement Showing profit or loss on the sale of MachineryCr.
Particulars
Amount
Book value of machinery as on 1st April 2015 when it was purchased12,000
Add: commission to an agent600
 60,600
Less: – Amount of Depreciation charged on the year 2015-16 
10,000*9%*12/125,400
 Amount of Depreciation charged on the year 2016-175,400
 Amount of Depreciation charged on the year 2017-18 
10,000*9%*6/122,700
Sale Price of Machinery 30,600
Loss on the sale of the asset16,500



Depreciation | Meaning | Methods | Examples

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Also, Check out the solved question of previous Chapters: –

  • Chapter No. 1 – Introduction to Accounting
  • Chapter No. 2 – Basic Accounting Terms
  • Chapter No. 3 – Theory Base of Accounting, Accounting Standards and International Financial Reporting Standards(IFRS)
  • Chapter No. 4 – Bases of Accounting
  • Chapter No. 5 – Accounting Equation
  • Chapter No. 6 – Accounting Procedures – Rules of Debit and Credit
  • Goods and Services Tax(GST)
  • Chapter No. 7 – Origin of Transactions – Source Documents and Preparation of Vouchers
  • Chapter No. 8 – Journal
  • Chapter No. 9 – Ledger
  • Chapter No. 10 – Special Purpose Books I – Cash Book
  • Chapter No. 11 – Special Purpose Books II – Other Books
  • Chapter No. 12 – Bank Reconciliation Statement
  • Chapter No. 13 – Trial Balance
  • Chapter No. 14 – Depreciation
  • Chapter No. 15 – Provisions and Reserves
  • Chapter No. 16 – Accounting for Bills of Exchange
  • Chapter No. 17 – Rectification of Errors
  • Chapter No. 18 – Financial Statements of Sole Proprietorship
  • Chapter No. 19 – Adjustments in preparation of Financial Statements
  • Chapter No. 20 – Accounts from incomplete Records – Single Entry System
  • Chapter No. 21 – Computers in Accounting
  • Chapter No. 22 – Accounting Software – Tally
  • Chapter No. 5 – Accounting Equation
  • Chapter No. 6 – Accounting Procedures – Rules of Debit and Credit
  • Goods and Services Tax(GST)
  • Chapter No. 8 – Journal
  • Chapter No. 9 – Ledger
  • Chapter No. 10 – Special Purpose Books I – Cash Book

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T.S. Grewal’s Double Entry Book Keeping

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