Question No 16 Chapter No 14 - T.S. Grewal 11 Class

Question No 16 Chapter No 14
With Goods and Services Tax (GST)

16. Following balances appear in the books of X Ltd. as on 1st April 2017:

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	Rs
Machinery A/c	5,00,000
Provision for Depreciation A/c	2,25,000

The machinery is depreciated @ 10% p.a. on the Fixed Instalment Method. The accounting year being April-March. On 1st October 2017, machinery which was purchased on 1st July 2014 for ₹ 1,00,000 was sold for ₹ 42,000 plus CGST and SGST @ 6% each and on the same date, a new machine was purchased for ₹ 2,00,000 paying IGST @ 12%. Prepare Machinery Account and Provision for Depreciation Account for the year ended 31st March 2018.

The solution of Question No 16 Chapter No 14: –

Dr.	Machine A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
01/04/17	To Balance b/d		5,00,000	31/03/16	By Provision for Deprecation A/c*1		32,500
01/04/17	To Bank A/c		2,00,000	31/03/16	By Bank A/c		42,000
				31/03/18	By Provision for Deprecation A/c*2		25,500
				31/03/18	By Balance C/d		6,00,000
			7,00,000				7,00,000

Dr.	Provision for Depreciation A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
01/10/17	To Machinery A/c		32,500	31/03/17	By Balance b/d A/c		2,25,000
				31/03/18	By Depreciation A/c		55,000
31/03/16	To Balance C/d		2,47,500
			2,80,000				2,80,000

Working note:-

Statement Showing profit or loss on the sale of Machinery	Cr.
Particulars	Amount
Book value of machinery as on 1st July, 2014 when it was purchased	1,00,000
Less: – Amount of Depreciation charged on the year 2014-15
1,00,00010%9/12	7,500
Amount of Depreciation charged on the year 2015-16	10,000
Amount of Depreciation charged on the year 2016-17	10,000
Amount of Depreciation charged on the year 2016-17
1,00,00010%6/12	5,000
Book value of the asset as on 1st April 2015	67,500
Sale Price of Machinery	42,000
Loss on the sale of the asset	25,500

*1:- Calculation of the amount of Depreciation on machinery for F/Y 2017-18
Purchased on 1st July 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 4,00,000
Rate of Depreciation = 10%
Period = from 01/03/17 to 31/03/18 i.e.12 months
(from the date of purchase/Beginning balance to the end of the financial year)
=4,00,000 X 10/100 X 12/12
Depreciation =40,000
Purchased 1st October 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,00,000
Rate of Depreciation = 10%
Period = from 01/10/17 to 31/03/18 i.e. 6 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 2,00,000 X 10/100 X 6/12
Depreciation = 10,000
Purchased on 1st July 2014
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,00,000
Rate of Depreciation = 10%
Period = from 01/03/17 to 31/10/17 i.e.6 months
(from the date of purchase/Beginning balance to the end of the financial year)
=1,00,000 X 10/100 X 6/12
Depreciation =5,000
Total Depreciation for the finical year 2017-18 =55,000

Depreciation | Meaning | Methods | Examples

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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