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/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 1st Jan.2010 To Bank A/c 5,00,000 31st Dec 2011 By Deprecation A/c 50,000 31st Dec 2011 By Balance C/d 4,50,000 5,00,000 5,00,000 1st Jan.2011 To Balance b/f 4,50,000 31st Dec 2012 By Deprecation A/c(45,000+10,000) 55,000 1st Sep.2011 To Bank A/c 3,00,000 31st Dec 2012 By Balance C/d 6,95,000 7,50,000 7,50,000 1st Jan.2012 To Balance b/f 6,95,000 31st Dec 2013 By Deprecation A/c(40,500 + 29,000) 69,500 31st Dec 2013 By Balance C/d (3,64,500 + 2,61,000) 6,25,500 6,95,000 6,95,000 1st Jan.2013 To Balance b/f 6,25,500 1st Jun 2014 By Deprecation A/c 3,645 1st Dec.2014 To Profit & Loss A/c 2,40,000 1st Jun 2014 By Bank A/c 48,200 1st Jun 2014 By Profit & Loss A/c 21,055 31st Dec 2014 By Deprecation A/c (29,160 + 26,100+2,000) 57,260 31st Dec 2014 By 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 Particulars Amount Machinery Purchase on of Equipment as on 1st Jan. 2010 1,00,000 Less: – Amount of Depreciation charged on the year 2010-11 1,00,000 *10%* 12/12 10,000 Amount of Depreciation charged on the year 2011-12 90,000 *10%* 12/12 9,000 Amount of Depreciation charged on the year 2012-13 81,000 *10%* 12/12 8,100 Amount of Depreciation charged on the year 2018-19 72,900 *10%* 11/12 3,645 Book value of asset as of 1st Oct 2019 69,255 Sale Price of Machinery 48,200 Loss on the sale of the asset 21,055

Depreciation | Meaning | Methods | Examples

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