Question No 16 Chapter No 13 – USHA Publication 11 Class

Question No 16 Chapter No 13

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   17,500
      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  
10,000*10%* 12/12 15,000
 Amount of Depreciation charged on the year 2016-17  
10,000*10%* 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

 

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

Chapter No. 8 – Journal Proper

Chapter No. 9 – Trial Balance 

Chapter No. 10 – Bank Reconciliation Statement

Chapter No. 11 – Depreciation

Chapter No. 12 – Provisions and Reserves 

Chapter No. 13 – Bills of Exchange

Chapter No. 14 – Rectification of Errors 

Chapter No. 15 – Financial Statements – (Without Adjustments)

Chapter No. 16 – Financial Statements – (With Adjustments)

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