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

Question No 14 Chapter No 14
Recording of Depreciation by Creating Provision for Depreciation Account
Without Good and Services Tax (GST)
14. Following Goods and Services Tax (GST)

		Rs
1st April 2015	Machinery A/c	80,000
	Provision for Depreciation A/c	36,000

On 1st April 2015, they decided to sell a machine for Rs 8,700. this machine was purchased for Rs 16,000 in April 2011. prepare the Provision for the depreciation Account and Machinery Account on 31st March 2016, assuming the firm has been charging Depreciation at 10% p.a. on straight Line Method

The solution of Question No 14 Chapter No 14: –

Dr.	Machine A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
01/04/15	To Balance b/d		80,000	31/03/16	By Provision for Deprecation A/c		6,400
01/10/15	To Cash A/c		80,000	31/03/16	By Bank A/c		8,700
01/04/16	To Balance b/d		2,20,000	31/03/16	By Provision for Deprecation A/c		24,000
				31/03/16	By Balance C/d		64,000
			80,000				80,000

Dr.	Provision for Depreciation A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
01/04/15	To Machinery A/c		6,400	31/03/16	By Balance b/d A/c		36,000
				31/03/16	By Depreciation A/c		6,400
31/03/16	To Balance C/d		36,000
			42,400				42,400

Working note:-

Statement Showing profit or loss on the sale of Machinery	Cr.
Particulars	Amount
Book value of machinery as on 1st April 2011 when it was purchased	16,000
Less: – Amount of Depreciation charged on the year 2011-12
16,00010%12/12	1,600
Amount of Depreciation charged on the year 2012-13	1,600
Amount of Depreciation charged on the year 2013-14	1,600
Amount of Depreciation charged on the year 2014-15	1,600
Book value of an asset as on 1st April 2015	9,600
Sale Price of Machinery	8,700
Loss on the sale of the asset	900

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