Question No 14 Chapter No 13 – USHA Publication 11 Class

Question No 14 Chapter No 13

Question No 14 Chapter No 13

Sale of Total Assets

14. Parshant Kishore purchased a plant for Rs 6,00,000 on 1st April 2016. The addition was made in the plant on 1st July 2017 for Rs 3,00,000. On 1st January 2019, one –third of the plant purchased on 1st April,2017 was sold for Rs 1,40,000
Prepare the plant Account and Depreciation account for the years 2016-17 to 2018-19, when depreciation was charged @20%p.a. on Straight-line basis and books are closed on 31st March every year.

The solution of Question No 14 Chapter No 13:-  

Dr. Plant A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/04/16 To Cash A/c   6,00,000 31/03/17 By Deprecation A/c*1   1,20,000
        31/03/17 By Balance C/d   4,80,000
      6,00,000       6,00,000
01/04/17 To Balance b/d   4,80,000 31/03/18 By Deprecation A/c*2   1,65,000
01/07/17 To Cash A/c   3,80,000 31/03/18 By Balance C/d   6,15,000
      7,80,000       7,80,000
01/04/18 To Balance b/d   6,15,000 01/01/19 By Deprecation A/c   30,000
01/01/19 To Profit on sale of Machinery   50,000 01/01/19 By Sale A/c   1,40,000
        31/03/19 By Deprecation A/c*3   1,40,000
        31/03/19 By Balance C/d   3,55,000
      6,65,000       6,65,000

 

Working note:-

*1:- Calculation of amount of Depreciation on furniture for year 2016-17
Machinery purchased on 1st April 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 6,00,000
Rate of Depreciation = 20%
Period = from 01/04/2016 to 31/03/2017 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 6,00,000 X 20/100 X 12 / 12
Depreciation = 1,20,000
Total Depreciation for the year = 1,20,000

*2:- Calculation of the amount of Depreciation on furniture for the year 2017-18
Machinery purchased on 1st April 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 6,00,000
Rate of Depreciation = 20%
Period = from 01/04/2017 to 31/03/2018 i.e. 12 months
(from the date of purchase/Beginning balance to end of the financial year)
= 6,00,000 X 10/100 X 3 / 12
Depreciation = 1,20,000
Machinery purchased on 1st July 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 3,00,000
Rate of Depreciation = 20%
Period = from 01/07/2017 to 31/03/2018 i.e. 9 months
(from the date of purchase/Beginning balance to end of the financial year)
= 3,00,000 X 20/100 X 9/ 12
Depreciation = 45,000
Total Depreciation for the year  1,65,000

Statement Showing profit or loss on the sale of Machinery  
Particulars
Amount
Purchase value of machinery as on 1st April 2016 1/3 2,00,000
Less: – Amount of Depreciation charged on the year 2016-17  
2,00,0000*20%* 12/12 40,000
 Amount of Depreciation charged on the year 2017-18  
2,00,0000*20%* 12/12 40,000
 Amount of Depreciation charged on the year 2018-19  
2,00,000*20%*9/12 30,000
Book value of the asset as on 1st January 2019 90,000
Sale Price of Machinery 1,40,000
Profit on the sale of the asset 50,000

 

*3:- Calculation of amount of Depreciation on furniture for year 2017-18
Machinery purchased on 1st April 2016 ½ left
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 4,00,000
Rate of Depreciation = 20%
Period = from 01/04/2018 to 31/10/2019 i.e. 12 months
(from the date of purchase/Beginning balance to end of the financial year)
= 4,00,000 X 20/100 X 12/ 12
Depreciation = 80,000
Machinery purchased on 1st July 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 3,00,000
Rate of Depreciation = 20%
Period = from 01/04/2018 to 31/03/2019 i.e. 12 months
(from the date of purchase/Beginning balance to end of the financial year)
= 3,00,000 X 20/100 X 12/ 12
Depreciation = 60,000
Total Depreciation for the year = 1,40,000

 

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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