Question No 13 Chapter No 13 – USHA Publication 11 Class

Question No 13 Chapter No 13

Question No 13 Chapter No 13

Sale of Total Assets

13. Arun Singh purchased furniture for Rs 1,90,000 and spent Rs 10,000 on its freight. Depreciation on furniture is charged @10% p.a. on fixed instalment method. The furniture was sold Rs 1,20,000. Books are closed on 31st March each year.
Calculate the profit or loss on the sale of furniture in the following alternative cases:

Case 1: Furniture was purchased on 1st April 2014 and sold 31st March 2019
Case 2: Furniture purchased on 1st October 2015 and sold on 31st March 2019
Case 3: Furniture purchased on 1st January 2015 and sold on 31st October 2018
Case 4: Furniture was purchased on 1sr April 2017 and sold on 31st December 2018

 

The solution of Question No 13 Chapter No 13:-  

Case 1: Furniture was purchased on 1st April,2014 and sold 31st March 2019

Dr. Furniture A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/04/14 To Cash A/c   2,00,000 31/03/15 By Deprecation A/c   20,000
        31/03/15 By Balance C/d   1,80,000
      2,00,000       2,00,000
01/04/15 To Balance b/d   1,80,000 31/03/16 By Deprecation A/c   20,000
        31/03/16 By Balance C/d   1,60,000
      1,80,000       1,80,000
01/04/16 To Balance b/d   1,60,000
31/03/17 By Deprecation A/c   20,000
        31/03/17 By Balance C/d   1,40,000
      1,60,000       1,60,000
01/04/17 To Balance b/f   1,40,000 31/03/18 By Deprecation A/c   20,000
        31/03/18 By Balance C/d   1,20,000
      1,40,000
      1,40,000
01/04/18 To Balance b/f   1,20,000 31/03/19 By Deprecation A/c   20,000
31/03/19 To Profit on sale of machinery   20,000 31/03/19 By Sale A/c   1,20,000
      1,40,000       1,40,000

 

Case 2: Furniture purchased on 1st October 2015 and sold on 31st March 2019

Dr. Furniture A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/10/15 To Cash A/c   2,00,000 31/03/16 By Deprecation A/c*1   10,000
        31/03/16 By Balance C/d   1,90,000
      2,00,000       2,00,000
01/04/16 To Balance b/d   1,90,000 31/03/17 By Deprecation A/c   20,000
        31/03/17 By Balance C/d   1,70,000
      1,90,000       1,90,000
01/04/17 To Balance b/d   1,70,000
31/03/18 By Deprecation A/c   20,000
        31/03/18 By Balance C/d   1,50,000
      1,70,000       1,70,000
01/04/18 To Balance b/f   1,50,000 31/03/19 By Deprecation A/c   20,000
        31/03/19 By Sale A/c   1,20,000
        31/03/19 By Loss on sale of machinery   10,000
      1,50,000       1,50,000

Working note:-

*1:- Calculation of amount of Depreciation on furniture for year 2015-16
Machinery purchased on 1st October 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,00,000
Rate of Depreciation = 10%
Period = from 01/10/2015 to 31/03/2016 i.e. 6 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 2,00,000 X 10/100 X 6 / 12
Depreciation = 10,000
Total Depreciation for the year = 10,000

Case 3: Furniture purchased on 1st January, 2015 and sold on 31st October,2018

Dr. Furniture A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/01/15 To Cash A/c   2,00,000 31/03/15 By Deprecation A/c*1   5,000
        31/03/15 By Balance C/d   1,95,000
      2,00,000       2,00,000
01/04/15 To Balance b/d   1,95,000 31/03/16 By Deprecation A/c   20,000
        31/03/16 By Balance C/d   1,75,000
      1,95,000       1,95,000
01/04/16 To Balance b/d   1,75,000
31/03/17 By Deprecation A/c   20,000
        31/03/17 By Balance C/d   1,55,000
      1,75,000       1,75,000
01/01/17 To Balance b/f   1,55,000 31/03/18 By Deprecation A/c   20,000
        31/03/18 By Balance C/d   1,35,000
      1,55,000
      1,55,000
01/04/18 To Balance b/f   1,35,000 31/03/19 By Deprecation A/c*2   11,667
        31/03/19 By Sale A/c   1,20,000
        31/03/19 By Loss on sale of machinery   3,333
      1,35,000       1,35,000

Working note:-

*1:- Calculation of the amount of Depreciation on furniture for the year 2014-15
Machinery purchased on 1st January 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,00,000
Rate of Depreciation = 10%
Period = from 01/01/2016 to 31/03/2017 i.e. 3 months
(from the date of purchase/Beginning balance to end of the financial year)
= 2,00,000 X 10/100 X 3 / 12
Depreciation = 5,000
Total Depreciation for the year  5,000

*2:- Calculation of amount of Depreciation on furniture for year 2017-18
Machinery purchased on 1st January 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,00,000
Rate of Depreciation = 10%
Period = from 01/04/2017 to 31/10/2017 i.e. 8 months
(from the date of purchase/Beginning balance to end of the financial year)
= 3,00,000 X10/100 X 12 / 12
Depreciation = 13,333
Total Depreciation for the year = 13,333

 

Case 4: Furniture was purchased on 1sr April, 2017 and sold on 31st December, 2018

 

Dr. Furniture A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/04/17 To Cash A/c   2,00,000 31/03/15 By Deprecation A/c*1   20,000
        31/03/15 By Balance C/d   1,80,000
      2,00,000       2,00,000
01/04/18 To Balance b/f   1,80,000 31/03/19 31/03/19   20,000
        31/03/19 By Balance C/d   1,60,000
      1,80,000       1,80,000
01/04/19 To Balance b/f   1,60,000 31/12/19 By Deprecation A/c*1   15,000
        31/12/19 By Sale A/c   1,60,000
        31/12/19 By Loss on sale of machinery   25,000
      1,60,000       1,60,000

 

Working note :-

*1:- Calculation of amount of Depreciation on furniture for year 2018-19
Machinery purchased on 1st April, 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,00,000
Rate of Depreciation = 10%
Period = from 01/04/2016 to 31/10/2018 i.e. 9 months
(from the date of purchase/Beginning balance to end of the financial year)
= 2,00,000 X 10/100 X 9 / 12
Depreciation = 15,000
Total Depreciation for the year = 15,000

 

Depreciation | Meaning | Methods | Examples

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Also, Check out the solved question of all Chapters: –

Chapter No. 1 – Introduction

Chapter No. 2 – Theory Base of Accounting 

Chapter No. 3 – Vouchers and transactions

Chapter No. 4 – Journal

Chapter No. 5 – Ledger

Chapter No. 6 – Cash Book

Chapter No. 7 – Other Subsidiary Books

Chapter No. 8 – Journal Proper

Chapter No. 9 – Trial Balance 

Chapter No. 10 – Bank Reconciliation Statement

Chapter No. 11 – Depreciation

Chapter No. 12 – Provisions and Reserves 

Chapter No. 13 – Bills of Exchange

Chapter No. 14 – Rectification of Errors 

Chapter No. 15 – Financial Statements – (Without Adjustments)

Chapter No. 16 – Financial Statements – (With Adjustments)

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