Question No 13 Chapter No 12

13. A firm purchased on 1st April, 2009, a second-hand Machinery for 36,000 and spent 4,000 on its installation. On 1st Oct. in the same year another Machinery costing 20,000 was purchased. On 1st Oct., 2011, the Machinery bought on 1st April, 2009 was sold off for 12,000 and on the same date a fresh Machine was purchased for 64,000. Depreciation is provided annually on 31st March, @ 10% p.a. on the Written Down Value Method. Show the Machine A/c from 1st April, 2009 to 31st March, 2013.

The solution of Question No 13 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 (36,000 + 4,000) 40,000 31st Mar2017 By Deprecation A/c(4,000+ 1,000) 5,000 1st Oct.2106 To Bank A/c 20,000 31st Mar2017 By Balance C/d(36,000 + 19,000) 55,000 60,000 60,000 1st Apr 2017 To Balance b/f 55,000 31st Mar2018 By Deprecation A/c (3,600 + 1,900) 5,500 31st Mar2018 By Balance C/d(32,400 + 17,100) 28,350 55,000 55,000 1st Apr 2018 To Balance b/f 49,500 1st Oct 2018 By Deprecation A/c 1,620 1st Oct.2108 To Bank A/c 64,000 1st Oct 2018 By Bank A/c 12,000 1st Oct 2018 By Profit & Loss A/c 18,780 31st Mar2019 By Deprecation A/c (1,710 + 3,200) 4,910 31st Mar2019 By Balance C/d (15,390 + 60,800) 76,190 1,13,500 1,13,500 1st Apr.2019 To Balance b/f 76,190 31st Mar2020 By Deprecation A/c (1,539 + 6,080) 5,500 31st Mar2020 By Balance C/d (13,851 + 54,720) 68,571 76,190 76,190

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 40,000 Less: – Amount of Depreciation charged on the year 2016-17 40,000 *10%* 12/12 4,000 Amount of Depreciation charged on the year 2017-18 36,000 *10%* 12/12 3,600 Amount of Depreciation charged on the year 2018-19 32,400 *10%* 6/12 1,620 Book value of asset as of 1st Oct 2019 30,780 Sale Price of Machinery 12,000 Loss on the sale of the asset 18,780

Depreciation | Meaning | Methods | Examples

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