# Question No 12 Chapter No 14 – T.S. Grewal 11 Class

Question No.12 - Chapter No.14- T.S. Grewal +1 Book 2019-Solution

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 20,000*10%*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

Comment if you have any question.

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

T.S. Grewal’s Double Entry Book Keeping