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Question No 15 Chapter No 13 – USHA
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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 – USHA
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:-
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*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
This is all about the Question No 15 Chapter No 13 – USHA
You can check out the following article to better understand:
Depreciation | Meaning | Methods | Examples
You Can also read all above articles in Hindi on our Hindi Website
Depreciation – Meaning – Methods – Examples -In Hindi
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Usha Publication – Elements of Book-Keeping PSEB (Class 11) – Solution
Chapter No. 2 – Theory Base of Accounting
Chapter No. 3 – Origin of Transactions
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Chapter No. 4 – Vouchers and transactions
Chapter No. 6 – Accounting for Goods and Services Tax(GST)
Chapter No. 9 – Other Subsidiary Books
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Chapter No. 10 – Journal Proper
Chapter No. 11 – Trial Balance
Chapter No. 12 – Bank Reconciliation Statement
Chapter No. 14 – Provisions and Reserves
Chapter No. 15 – Bills of Exchange
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Chapter No. 16 – Rectification of Errors
Chapter No. 17 – Financial Statements – (Without Adjustments)
Chapter No. 18 – Financial Statements – (With Adjustments)
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