Question No 17 Chapter No 13
Sale of Total Assets
17. Raj Vaid purchased the machinery on 1st April 2016 for Rs 65,000. He engaged Kabul to erect the units, who charged Rs 5,000 and agreed to month for his payment. The machinery was depreciated at @10% p.a. on the fixed instalment method. On 1st October 2018, a single unit which cost Rs 10,000 original was sold for the cash price of Rs 10,000. on the same date, new machinery costing Rs 10,000( paid by cheque) was installed.
Write the date, anew machine Account for the years 216-17 to 2018-19
The solution of Question No 17 Chapter No 13:-
| Dr. | Machinery A/c | Cr. | |||||
| Date | Particulars |
J.F. | Amount | Date | Particulars |
J.F. | Amount |
| 01/04/16 | To Cash A/c | 65,000 | 31/03/17 | By Deprecation A/c*1 | 7,000 | ||
| 01/04/16 | To Kabul A/c | 5,000 | 31/03/17 | By Balance C/d | 63,000 | ||
| 70,000 | 70,000 | ||||||
| 01/04/17 | To Balance b/d | 63,000 | 31/03/18 | By Deprecation A/c*2 | 7,000 | ||
| 31/03/18 | By Balance C/d | 56,000 | |||||
| 63,000 | 63,000 | ||||||
| 01/04/17 | To Balance b/d | 56,000 | 01/10/17 | By BAnk A/c | 10,000 | ||
| 01/10/17 | To Profit/loss A/c | 2,500 | 01/10/17 | By Deprecation A/c | 500 | ||
| 01/10/17 | To Bank A/c | 10,000 | 31/03/18 | By Deprecation A/c*3 | 6,500 | ||
| 31/03/18 | By Balance C/d | 51,500 | |||||
| 68,500 | 68,500 | ||||||
Working note:-
*1:- Calculation of amount of Depreciation on furniture for year 2016-17
Machinery purchased on 1st April 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 70,000
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)
= 70,000 X 20/100 X 12 / 12
Depreciation = 7,000
Total Depreciation for the year = 7,000
*2:- Calculation of the amount of Depreciation on furniture for the year 2017-18
Machinery purchased on 1st April 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 70,000
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)
=70,000 X 10/100 X 12/ 12
Depreciation = 7,000
Total Depreciation for the year 7,000
| Statement Showing profit or loss on the sale of Machinery | |
| Particulars |
Amount |
| Purchase value of machinery as on 1st April, 2016 | 10,000 |
| Less: – Amount of Depreciation charged on year 2016-17 | |
| 10,000*10%* 12/12 | 1,000 |
| Amount of Depreciation charged on year 2017-18 | |
| 10,000*10%*12/12 | 1,000 |
| Amount of Depreciation charged on year 2017-18 | |
| 10,000*10%*6/12 | 500 |
| Book value of the asset as on 1st January 2019 | 7,500 |
| Sale Price of Machinery | 10,000 |
| Profit on the sale of the asset | 2,500 |
*3:- Calculation of the amount of Depreciation on furniture for the year 2017-18
Machinery purchased on 1st April 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Machinery purchased on 1st April 2016
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)
= 60,000 X 10/100 X 12/ 12
Depreciation = 6,000
Machinery purchased on 1st October 2016
Value of Asset = 10,000
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 end of the financial year)
= 10,000 X 10/100 X 6/ 12
Depreciation =500
Total Depreciation for the year = 6,500
Depreciation | Meaning | Methods | Examples
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Also, Check out the solved question of all Chapters: –
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
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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)