Question No 13 Chapter No 14 - T.S. Grewal 11 Class

Question No 13 Chapter No 14

13. A firm purchased a second- hand machine on 1st April 2015 and paid 1,40,000 for it. It spent on its overhauling and installation Rs 20,000. on 1st October 2015, another machine costing Rs 80,000 was purchased. On 1st October 2017, the machine purchased on 1st April 2015 was disposed of for Rs 1,04,000, charging CGST and SGST @6% each and new machine costing Rs 2,00,000 was installed, paying CGST and SGST @6% each. Deprecation as provided @10%p.a. by the Straight Line method. Give the Machinery Account and Deprecation Account for the 3 years. Firm ‘s books are closed on 31st March every year.

The solution of Question No 13 Chapter No 14: –

Dr.	Machine A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
01/04/15	To Cash A/c		1,60,000	31/03/16	By Deprecation A/c *1		20,000
01/10/15	To Cash A/c		80,000	31/03/16	By Balance C/d		2,20,000
			2,40,000				2,40,000
01/04/16	To Balance b/d		2,20,000	31/03/17	By Deprecation A/c		24,000
				31/03/17	By Balance C/d		1,96,000
			2,20,000				2,20,000
01/04/17	To Balance b/d		1,96,000	01/10/17	By Cash A/c		1,04,000
01/10/17	To Cash A/c		2,00,000	01/10/17	By Deprecation A/c		8,000
				01/10/17	By loss on the sale of plant A/c		16,000
				31/03/18	By Deprecation A/c		18,000
				31/03/18	By Balance C/d		2,50,000
			3,96,000				3,96,000

Dr.	Depreciation A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
31/06/16	To Machinery A/c		20,000
				31/03/16	By Profit and Loss A/c		20,000
			20,000				20,000
31/03/17	To Machinery A/c		24,000
				31/03/17	By Profit and Loss A/c		24,000
			24,000				24,000
01/10/17	To Machinery A/c		8,000
31/03/18	To Machinery A/c		18,000
				31/03/18	By Profit and Loss A/c		26,000
			26,000				26,000

Working note:-

*1:- Calculation of the amount of Depreciation on machinery for F/Y 2015-16
Purchased on 1st April 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,60,000
Rate of Depreciation = 10%
Period = from 01/04/15 to 31/03/16 i.e. 9 months
(from the date of purchase/Beginning balance to the end of the financial year)
=1,60,000 X 10/100 X 12/12
Depreciation =16,000

Purchased 1st October 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 80,000
Rate of Depreciation = 10%
Period = from 01/10/15 to 31/03/16 i.e. 6 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 80,000 X 10/100 X 6/12
Depreciation = 4,000
Total Depreciation for the finical year 2014-15 =20,000

*2:- Calculation of the amount of Depreciation on machinery for F/Y 2017-18
Purchased on 1st October 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 80,000
Rate of Depreciation = 10%
Period = from 01/04/17 to 31/03/18 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
=80,000 X 10/100 X 12/12
Depreciation =8,000
Purchased 1st October 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,00,000
Rate of Depreciation = 10%
Period = from 01/10/15 to 31/03/16 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 = 1,000
Total Depreciation for the finical year 2017-18= 18,000

One –third of the plant was sold

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Statement Showing profit or loss on the sale of Machinery	Cr.
Particulars	Amount
Book value of machinery as on 1st April 2015 when it was purchased	1,60,000
Less: – Amount of Depreciation charged on the year 2015-16
1,60,00010%12/12	16,000
Amount of Depreciation charged on the year 2016-17	16,000
Amount of Depreciation charged on the year 2017-18
1,60,00010%6/12	8,000
Sale Price of Machinery	1,04,000
Loss on the sale of the asset	16,000

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