Question No 12 Chapter No 14 - T.S. Grewal 11 Class

Question No 12 Chapter No 14

12. On 1st July 2015, Sohan Lal & Sons purchased a plant costing Rs 60,000. The additional plant was purchased on 1st January 2016 for Rs 40,000 and on 1st October 2016 for Rs 20,000, 1st July 2015 was found to have become obsolete and was sold for Rs 6,000, charging CGST and SGST @6% each.
Prepare the plant Account for the first three years in the books of Sohan Lal & Sons. Depreciation is charged @ 10% p.a. on straight line Method . The account is closed on 31st March each year.

The solution of Question No 12 Chapter No 14: –

Dr.	Machine A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
01/8/15	To Cash A/c		60,000	31/03/16	By Deprecation A/c *1		5,500
01/01/16	To Cash A/c		40,000	31/03/16	By Balance C/d		94,500
			1,00,000				1,00,000
01/04/16	To Balance b/d		94,500	31/03/17	By Deprecation A/c*2		11,000
01/10/16	To Cash A/c		20,000	31/03/17	By Balance C/d		1,03,500
			1,14,500				1,14,500
01/04/17	To Balance b/d		1,03,500	01/04/17	By Cash A/c		6,000
				01/04/17	By loss on the sale of plant A/c		10,500
				31/03/18	By Deprecation A/c		10,000
				31/03/18	By Balance C/d		77,000
			1,03,500				1,03,500

Working note:-

*1:- Calculation of the amount of Depreciation on machinery for F/Y 2015-16
Purchased on 1st July 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 60,000
Rate of Depreciation = 10%
Period = from 01/07/15 to 31/03/16 i.e. 9 months
(from the date of purchase/Beginning balance to the end of the financial year)
=60,000 X 10/100 X 9/12
Depreciation =4,500
Purchased 1st January 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 40,000
Rate of Depreciation = 10%
Period = from 01/1/15 to 31/03/16 i.e. 3 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 40,000 X 10/100 X 3/12
Depreciation = 1,000
Total Depreciation for the finical year 2014-15 =5,500
*2:- Calculation of the amount of Depreciation on machinery for F/Y 2016-17
Purchased on 1st July 2015 and on 1st January 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,00,000
Rate of Depreciation = 10%
Period = from 01/04/16 to 31/03/17 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
=60,000 X 10/100 X 12/12
Depreciation =10,000
Purchased 1st October 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 20,000
Rate of Depreciation = 10%
Period = from 01/10/16 to 31/03/17 i.e.6 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 20,000 X 10/100 X 6/12
Depreciation = 1,000
Total Depreciation for the finical year 2016-17= 11,000

One –third of the plant was sold

Statement Showing profit or loss on the sale of Machinery	Cr.
Particulars	Amount
Book value of machinery as on 1st July 2015 when it was purchased	20,000
Less: – Amount of Depreciation charged on the year 2015-16
20,00010%9/12	1,500
Amount of Depreciation charged on the year 2016-17	2,000
Sale Price of Machinery	6,000
Loss on the sale of the asset	10,500

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