Question No 18 Chapter No 13
Sale of Total Assets
18. Majha Transport company purchased 5 trucks at Rs 50,000 each on 1st July,2015. the company writes off depreciation @20% p.a. on original cost and observe financial years as it its accounting years.
On 1st January, 2018, one of the trucks met with an accident and is completely destroyed. Insurance company paid Rs 22,500 in full settlement of the claim. On the same day, the company purchased another truck for Rs 25,000 and spent Rs 5,000 o its overhauling.
Prepare Truck Account for 3 years ending 31st March,2018
The solution of Question No 18 Chapter No 13:-
| Dr. | Truck A/c | Cr. | |||||
| Date | Particulars |
J.F. | Amount | Date | Particulars |
J.F. | Amount |
| 01/07/15 | To Cash A/c | 2,50,000 | 31/03/16 | By Deprecation A/c*1 | 37,500 | ||
| 31/03/16 | By Balance C/d | 2,12,500 | |||||
| 2,50,000 | 2,50,000 | ||||||
| 01/04/16 | To Balance b/d | 2,12,500 | 31/03/17 | By Deprecation A/c*2 | 50,000 | ||
| 31/03/17 | By Balance C/d | 1,62,500 | |||||
| 2,12,500 | 2,12,500 | ||||||
| 01/04/17 | To Balance b/d | 1,62,500 | 01/01/18 | By Bank A/c | 22,500 | ||
| 01/01/18 | To Profit/loss A/c | 30,000 | 01/01/18 | By Profit/Loss A/c | 2,500 | ||
| 01/01/18 | By Deprecation A/c | 7,500 | |||||
| 31/03/18 | By Deprecation A/c*3 | 41,500 | |||||
| 31/03/18 | By Balance C/d | 1,18,500 | |||||
| 1,92,500 | 1,92,500 | ||||||
Working note:-
*1:- Calculation of the amount of Depreciation on furniture for the year 2015-16
Machinery purchased on 1st Jul 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,50,000
Rate of Depreciation = 20%
Period = from 01/07/2015 to 31/03/2016 i.e. 9 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 2,50,000 X 20/100 X 9/ 12
Depreciation = 37,500
Total Depreciation for the year = 37,500
*2:– Calculation of the amount of Depreciation on furniture for year 2016-17
Machinery purchased on 1st Jul 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,50,000
Rate of Depreciation = 20%
Period = from 01/04/2016 to 31/03/2017 i.e. 9 months
(from the date of purchase/Beginning balance to end of the financial year)
= 2,50,000 X 20/100 X 9/ 12
Depreciation = 50,000
Total Depreciation for the year 50,000
| Statement Showing profit or loss on the sale of Machinery | |
| Particulars |
Amount |
| Purchase value of machinery as on 1st July, 2015 | 50,000 |
| Less: – Amount of Depreciation charged on year 2015-16 | |
| 50,000*10%* 9/12 | 7,500 |
| Amount of Depreciation charged on year 2016-17 | |
| 50,000*10%* 12/12 | 10,000 |
| Amount of Depreciation charged on year 2017-18 | |
| 50,000*10%* 9/12 | 7,500 |
| Book value of the asset as on 1st January 2019 | 25,000 |
| Sale Price of Machinery | 22,500 |
| Loss 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 Jul 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,00,000
Rate of Depreciation = 20%
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)
= 2,00,000 X 20/100 X 12/ 12
Depreciation = 40,000
Machinery purchased on 1st October 2016
Value of Asset = 25,000
Rate of Depreciation = 20%
Period = from 01/01/2017 to 31/03/2017 i.e. 3 months
(from the date of purchase/Beginning balance to end of the financial year)
= 25,000 X 20/100 X 3/ 12
Depreciation =1.250
Total Depreciation for the year = 41,250
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
Chapter No. 9 – Trial Balance
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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)