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

Question No 17 Chapter No 14

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

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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

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T.S. Grewals Double Entry Book Keeping - Question No 17 Chapter No 14 - T.S. Grewal 11 Class

T.S. Grewal’s Double Entry Book Keeping

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