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/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 1st Apr.2106 To Bank A/c (30,000 +4,000 + 1,000) 35,000 31st Mar2017 By Deprecation A/c 3,500 31st Mar2017 By Balance C/d 31,500 35,000 35,000 1st Apr 2017 To Balance b/f 31,500 31st Mar2018 By Deprecation A/c 3,150 31st Mar2018 By Balance C/d 28,350 31,500 31,500 1st Apr 2018 To Balance b/f 28,350 1st Oct 2018 By Deprecation A/c 1,418 1st Oct 2018 By Bank A/c 25,000 1st Oct 2018 By 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. 2016 35,000 Less: – Amount of Depreciation charged on the year 2016-17 35,000 *10%* 12/12 15,000 Amount of Depreciation charged on the year 2017-18 35,0000 *10%* 12/12 3,150 Amount of Depreciation charged on the year 2018-19 28,350 *10%* 6/12 1,418 Book value of asset as on 1st Oct , 2019 26,932 Sale Price of Machinery 25,000 Loss on the sale of the asset 1,932

Depreciation | Meaning | Methods | Examples

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

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