Question No 16 Chapter No 13 - USHA Publication 11 Class

Question No 16 Chapter No 13

Sale of Total Assets

16. A machinery was purchased for Rs 10,000 on 1st April,2015 by Asees Kaur. It was decided to depreciate it at the rate of 10% p.a. on original cost method . On 1st October,2016, another machinery was purchased for Rs 20,000. on 1st April, 2017, the machinery bought on 1st April, 2015 was sold for Rs 8,500
Prepare Machinery Account for Rs three years assuming that the books are closed on 31st March, each year

The solution of Question No 16 Chapter No 13:-

Dr.	Machinery A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
01/04/15	To Cash A/c		10,000	31/03/16	By Deprecation A/c*1		1,000
				31/03/16	By Balance C/d		9,000
			10,000				10,000
01/04/16	To Balance b/d		9,000	31/03/17	By Deprecation A/c*2		2,000
01/10/16	To Cash A/c		20,000	31/03/17	By Balance C/d		27,000
			29,000				27,000
01/04/17	To Balance b/d		27,000	01/04/17	By Sale A/c		8,500
01/04/17	To Profit/loss A/c		500	31/03/18	By Deprecation A/c*3		2,000
				31/03/18	By Balance C/d		17,000
			27,500				27,500

Working note:-

*1:- Calculation of amount of Depreciation on furniture for year 2015-16
Machinery purchased on 1st April 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 10,000
Rate of Depreciation = 10%
Period = from 01/04/2015 to 31/03/2016 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 10,000 X 20/100 X 12 / 12
Depreciation = 1,000
Total Depreciation for the year = 1,000

*2:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Machinery purchased on 1st April 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 10,000
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 the end of the financial year)
= 10,000 X 10/100 X 12/ 12
Depreciation = 1,000
Machinery purchased on 1st October 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 20,000
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 the end of the financial year)
= 20,000 X 10/100 X 6/ 12
Depreciation = 1,000
Total Depreciation for the year 2,000

Statement Showing profit or loss on the sale of Machinery
Particulars	Amount
Purchase value of machinery as on 1st April 2015	10,000
Less: – Amount of Depreciation charged on the year 2015-16
10,00010% 12/12	15,000
Amount of Depreciation charged on the year 2016-17
10,00010% 12/12	20,000
Book value of the asset as on 1st January 2019	8,000
Sale Price of Machinery	8,500
Profit on the sale of the asset	500

*3:- Calculation of the amount of Depreciation on furniture for the year 2017-18
Machinery purchased on 1st October 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 20,000
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)
= 20,000 X 10/100 X 12/ 12
Depreciation = 2,000
Total Depreciation for the year = 2,000

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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