# Question No 16 Chapter No 14 – T.S. Grewal 11 Class

Question No.16 - Chapter No.14- T.S. Grewal +1 Book 2019-Solution

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:

 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 1,00,000*10%*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 1,00,000*10%*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

Comment if you have any question.

Also, Check out the solved question of previous Chapters: –

• 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