Question No 16 Chapter No 12

Question No 16 Chapter No 12

16. A company whose accounting year is calendar year purchased machinery for 5,00,000on 1st January 2010. Additional machinery was acquired for 3,00,000 on 1st September 2011 and for 2,40,000 on 1st December 2014. Certain machinery purchased for 1,00,000 on 1st January 2010 was 2010 was sold for 48,200 on 30th June 2013.
Prepare the machinery account upto the year 2014 after providing depreciation at 10% per annum on reducing instalment method.

The solution of Question No 16 Chapter No 12: –

Dr.Machinery A/cCr.
1st Jan.2010To Bank A/c 5,00,00031st Dec 2011By Deprecation A/c 50,000
    31st Dec 2011By Balance C/d  4,50,000
   5,00,000   5,00,000
1st Jan.2011To Balance b/f 4,50,00031st Dec 2012By Deprecation A/c(45,000+10,000) 55,000
1st Sep.2011To Bank A/c 3,00,00031st Dec 2012By Balance C/d
   7,50,000   7,50,000
1st Jan.2012To Balance b/f 6,95,00031st Dec 2013By Deprecation A/c(40,500 + 29,000) 69,500
    31st Dec 2013By Balance C/d (3,64,500 + 2,61,000) 6,25,500
1st Jan.2013To Balance b/f 6,25,5001st Jun 2014By Deprecation A/c 3,645
1st Dec.2014To Profit & Loss A/c 2,40,0001st Jun 2014By Bank A/c 48,200
    1st Jun 2014By Profit & Loss A/c 21,055
    31st Dec 2014By Deprecation A/c (29,160 + 26,100+2,000) 57,260
    31st Dec 2014By Balance C/d 7,35,340
   8,65,500   8,65,500

Working Note:
Calculation of Profit or Loss on Sale

Statement Showing profit or loss on the sale of Machinery
Machinery Purchase on of Equipment as on 1st Jan. 20101,00,000
Less: – Amount of Depreciation charged on the year 2010-11 
1,00,000 *10%* 12/1210,000
Amount of Depreciation charged on the year 2011-12 
90,000 *10%* 12/129,000
Amount of Depreciation charged on the year 2012-13 
81,000 *10%* 12/128,100
Amount of Depreciation charged on the year 2018-19 
72,900 *10%* 11/123,645
Book value of asset as of 1st Oct 201969,255
Sale Price of Machinery 48,200
Loss on the sale of the asset21,055

Depreciation | Meaning | Methods | Examples

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D K Goel – New ISC Accountancy -(Class 11 – ICSE)- Solution

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ISC Accounts 11 20 Image min 197x300 - Question No 16 Chapter No 12 - D.K Goal 11 Class
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