Question No 17 Chapter No 13 – USHA Publication 11 Class

Question No 17 Chapter No 13

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. 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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