Question No 15 Chapter No 13 – USHA Publication 11 Class

Question No 15 Chapter No 13

Sale of Total Assets

15. Prabhu Deva purchased a machine for Rs 10,00,000 on 1st July 2015. it further purchased the machine for Rs 4,00,000 on 1st October 2016. in July 2017, one-fifth of the machinery purchased on 1st July 2015 was sold at 80% of book value.
Prepare the machinery account for the years 2015-16 to 2018-19, when depreciation was charged @10% p.a. on the fixed instalment method

The solution of Question No 15 Chapter No 13:-

 Dr. Machinery A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 01/07/15 To Cash A/c 10,00,000 31/03/16 By Deprecation A/c*1 75,000 31/03/16 By Balance C/d 9,25,000 10,00,000 10,00,000 01/04/16 To Balance b/d 9,25,000 31/03/17 By Deprecation A/c*2 1,20,000 01/10/16 To Cash A/c 4,00,000 31/03/17 By Balance C/d 12,05,000 12,05,000 13,25,000 01/04/17 To Balance b/d 12,05,000 01/07/18 By Deprecation A/c 5,000 01/07/18 By Sale A/c 1,28,000 01/07/18 By Profit/Loss A/c 32,000 31/03/18 By Deprecation A/c*3 1,20,000 31/03/18 By Balance C/d 9,20,000 12,05,000 12,05,000 01/03/18 To Balance b/f 9,20,000 31/03/19 By Deprecation A/c*4 1,20,000 31/03/19 By Balance C/d 8,00,000 9,20,000 9,20,000

Working note:-

*1:- Calculation of amount of Depreciation on furniture for year 2015-16
Machinery purchased on 1st July 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 10,00,000
Rate of Depreciation = 10%
Period = from 01/07/2015 to 31/03/2016 i.e. 9 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 10,00,000 X 20/100 X 9 / 12
Depreciation = 75,000
Total Depreciation for the year = 75,000

*2:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Machinery purchased on 1st July 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 10,00,000
Rate of Depreciation = 10%
Period = from 01/04/2016 to 31/03/2017 i.e. 12 months
(from the date of purchase/Beginning balance to end of the financial year)
= 10,00,000 X 10/100 X 12/ 12
Depreciation = 1,00,000
Machinery purchased on 1st October 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 4,00,000
Rate of Depreciation = 10%
Period = from 01/10/2016 to 31/03/2017 i.e. 6 months
(from the date of purchase/Beginning balance to end of the financial year)
Depreciation = 20,000
Total Depreciation for the year  1,20,000

 Statement Showing profit or loss on the sale of Machinery Particulars Amount Purchase value of machinery as on 1st July, 2015 1/5 2,00,000 Less: – Amount of Depreciation charged on the year 2015-16 2,00,000*10%* 9/12 15,000 Amount of Depreciation charged on the year 2016-17 2,00,000*10%*12/12 20,000 Amount of Depreciation charged on the year 2017-18 2,00,000*10%*3/12 5,000 Book value of the asset as on 1st January 2019 1,60,000 Sale Price of Machinery 1,28,000 Losson the sale of the asset 32,000

*3:- Calculation of amount of Depreciation on furniture for year 2017-18
Machinery purchased on 1st July 1/5 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 8,00,000
Rate of Depreciation = 10%
Period = from 01/04/2017 to 31/10/2018 i.e. 12 months
(from the date of purchase/Beginning balance to end of the financial year)
= 8,00,000 X 10/100 X 12/ 12
Depreciation = 80,000
Machinery purchased on 1st October 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 4,00,000
Rate of Depreciation = 10%
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)
= 4,00,000 X 10/100 X 12/ 12
Depreciation = 40,000
Total Depreciation for the year = 1,20,000

*4:- Calculation of the amount of Depreciation on furniture for the year 2017-18
Machinery purchased on 1st July 1/5 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 8,00,000
Rate of Depreciation = 10%
Period = from 01/04/2017 to 31/10/2018 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)

= 8,00,000 X 10/100 X 12/ 12
Depreciation = 80,000
Machinery purchased on 1st October 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 4,00,000
Rate of Depreciation = 10%
Period = from 01/04/2017 to 31/03/2018 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 4,00,000 X 10/100 X 12/ 12
Depreciation = 40,000
Total Depreciation for the year = 1,20,000

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)