Question No 12 Chapter No 12

Question No 12 Chapter No 12

12. A Company purchased a second-hand machine on 1st April, 2016, for 30,000 and immediately spent 4,000 on its repair and 1,000 on its installation. On Oct. 1, 2018, the machine was sold for 25,000. Prepare Machine Account after charging depreciation @ 10% p.a. by diminishing balance method, assuming that the books are closed on 31st March every year. IGST was charged @ 12% on purchase and sale of machine.

The solution of Question No 12 Chapter No 12: –

Dr.Machinery A/cCr.
DateParticulars
J.F.AmountDateParticulars
J.F.Amount
1st Apr.2106To Bank A/c (30,000 +4,000 + 1,000) 35,00031st Mar2017By Deprecation A/c 3,500
    31st Mar2017By Balance C/d 31,500
   35,000   35,000
1st Apr 2017To Balance b/f 31,50031st Mar2018By Deprecation A/c 3,150
    31st Mar2018By Balance C/d
 28,350
   31,500   31,500
1st Apr 2018To Balance b/f 28,3501st Oct 2018By Deprecation A/c 1,418
    1st Oct 2018By Bank A/c 25,000
    1st Oct 2018By Profit & Loss A/c 1,932
   25,350   25,350

Working Note:
Calculation of Profit or Loss on Sale

Statement Showing profit or loss on the sale of Machinery
Particulars
Amount
Machinery Purchase on of Equipment as on 1st Apr. 201635,000
Less: – Amount of Depreciation charged on the year 2016-17 
35,000 *10%* 12/1215,000
Amount of Depreciation charged on the year 2017-18 
35,0000 *10%* 12/123,150
Amount of Depreciation charged on the year 2018-19 
28,350 *10%* 6/121,418
Book value of asset as on 1st Oct , 201926,932
Sale Price of Machinery 25,000
Loss on the sale of the asset1,932

Depreciation | Meaning | Methods | Examples

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D K Goel – New ISC Accountancy -(Class 11 – ICSE)- Solution

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