# Question No 17 Chapter No 14 – T.S. Grewal 11 Class

Question No.17 - Chapter No.14- T.S. Grewal +1 Book 2019-Solution

Question No 17 Chapter No 14

17. A Limited has the following balances on 1st April, 2017:

 Rs Machinery A/c 2,00,000 Provision for Depreciation A/c 90,000

The company charged depreciation @ 10% p.a. on Straight Line Method. Accounts are closed on 31st March every year. On 1st October 2017, a part of machinery purchased on 1st July 2014 for ₹ 40,000 was sold for ₹ 18,400, charging CGST and SGST @ 6% each and on the same date, a new plant was purchased for ₹ 1,00,000 plus IGST @ 12%.
Prepare ‘Machinery Account’ and ‘Provision for Depreciation Account’ for the year ended 31st March 2018.

The solution of Question No 17  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 2,00,000 31/10/17 By Provision for Deprecation A/c*1 13,000 01/04/17 To Bank A/c 1,00,000 31/10/17 By Bank A/c 18,400 31/03/18 By Provision for Deprecation A/c*2 8,600 31/03/18 By Balance C/d 2,60,000 3,00,000 3,00,000

 Dr. Provision for Depreciation A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 01/10/17 To Machinery A/c 13,000 31/03/17 By Balance b/d A/c 90,000 31/03/18 By Depreciation A/c 23,000 31/03/16 To Balance C/d 1,00,000 1,13,000 1,13,000

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 40,000*10%*9/12 3,000 Amount of Depreciation charged on the year 2015-16 4,000 Amount of Depreciation charged on the year 2016-17 4,000 Amount of Depreciation charged on the year 2016-17 40,000*10%*6/12 2,000 Book value of the asset as on 1st April 2015 27,000 Sale Price of Machinery 18,400 Loss on the sale of the asset 8,600

*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 = 1,60,000
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)
=1,60,000 X 10/100 X 9/12
Depreciation =16,000
Purchased 1st October 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,00,000
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)
= 1,00,000 X 10/100 X 6/12
Depreciation = 5,000
Purchased on 1st July 2014
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 40,000
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)
=40,000 X 10/100 X 6/12
Depreciation =2,000
Total Depreciation for the finical year 2017-18 =23,000

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