Question No 14 Chapter No 12

Question No 14 Chapter No 12

14. A Company purchased a machinery for 50,000 on 1st Oct., 2016. Another machinery costing 10,000 was purchased on 1st Dec., 2017. On 31st March, 2019, the machinery purchased in 2016 was sold at a loss of 5,000. The Company charges depreciation at the rate of 15% p.a. on Diminishing Balance Method. Accounts are closed on 31st March every year. Prepare Machinery account for 3 years.

The solution of Question No 14 Chapter No 12: –

Dr.Machinery A/cCr.
DateParticulars
J.F.AmountDateParticulars
J.F.Amount
1st Oct.2116To Bank A/c (36,000 + 4,000) 50,00031st Mar2017By Deprecation A/c (6 months) 3,750
    31st Mar2017By Balance C/d(36,000 + 19,000) 46,250
   50,000   50,000
1st Apr 2017To Balance b/f 46,25031st Mar2018By Deprecation A/c (6,938 + 500) 7,438
1st Dec.2108To Bank A/c 10,00031st Mar2018By Balance C/d(39,312 + 9,500 )
 28,350
   56,250   56,250
1st Apr 2018To Balance b/f 48,81231st Mar2019By Deprecation A/c 5,897
    31st Mar2019By Bank A/c 28,415
    31st Mar2019By Profit & Loss A/c 5,000
    31st Mar2019By Deprecation A/c (1,710 + 3,200) 1,425
    31st Mar2019By Balance C/d 8,075
   48,812   48,812

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 Oct. 201640,000
Less: – Amount of Depreciation charged on the year 2016-17 
50,000 *15%* 6/123,750
Amount of Depreciation charged on the year 2017-18 
46,250 *15%* 12/126,938
Amount of Depreciation charged on the year 2018-19 
39,312 *15%* 12/125,897
Book value of asset as of 1st Oct 201933,415
Sale Price of Machinery 28,415
Loss on the sale of the asset5,000

Depreciation | Meaning | Methods | Examples

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D K Goel – New ISC Accountancy -(Class 11 – ICSE)- Solution

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ISC Accounts 11 20 Image min 197x300 - Question No 14 Chapter No 12 - D.K Goal 11 Class
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