Question No 15 Chapter No 14
15. Following balances appear in the books of Priyank Brothers:
| Rs | ||
| 1st April 2015 | Machinery A/c | 20,00,000 |
| Provision for Depreciation A/c | 8,00,000 |
On 1st April, 2016, they decide to sell a machine for ₹ 5,00,000. This machine was purchased for ₹ 7,50,000 on 1st April, 2013. Prepare the Machinery Account and Provision for Depreciation Account for the year ended 31st March, 2017 assuming that the firm has been charging Depreciation @ 10% p.a. on the Straight Line Method
The solution of Question No 15 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 | 20,00,000 | 31/03/16 | By Provision for Deprecation A/c | 2,25,000 | ||
| 31/03/16 | By Bank A/c | 5,00,000 | |||||
| 31/03/16 | By Provision for Deprecation A/c | 25,000 | |||||
| 31/03/16 | By Balance C/d | 12,50,000 |
|||||
| 20,00,000 | 20,00,000 | ||||||
| Dr. | Provision for Depreciation A/c | Cr. | |||||
| Date | Particulars |
J.F. | Amount | Date | Particulars |
J.F. | Amount |
| 01/04/15 | To Machinery A/c | 2,25,000 | 31/03/16 | By Balance b/d A/c | 8,00,000 | ||
| 31/03/16 | By Depreciation A/c | 1,25,000 | |||||
| 31/03/16 | To Balance C/d | 7,00,000 | |||||
| 9,25,000 | 9,25,000 | ||||||
Working note:-
| Statement Showing profit or loss on the sale of Machinery | Cr. |
| Particulars |
Amount |
| Book value of machinery as on 1st April 2013 when it was purchased | 7,50,000 |
| Less: – Amount of Depreciation charged on the year 2013-14 | |
| 7,50,000*10%*12/12 | 75,000 |
| Amount of Depreciation charged on the year 2014-15 | 75,000 |
| Amount of Depreciation charged on the year 2015-16 | 75,000 |
| Book value of the asset as on 1st April 2015 | 5,25,000 |
| Sale Price of Machinery | 5,00,000 |
| Loss on the sale of the asset | 25,000 |
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
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