Question No 18 Chapter No 14 – T.S. Grewal 11 Class

Question No 18 Chapter No 14

Question No 18 Chapter No 14

Written Down value Method
Without Goods and Services Tax (GST)
18. The original cost of furniture amounted to ₹ 4,000 and it is decided to write off 5% on the original cost as depreciation at the end of each year. Show the Ledger Account as it will appear during the first four years. Show also how the same account will appear if it was decided to write off 5% on the diminishing balance of the asset each year.


The solution of Question No 18  Chapter No 14: –

(Original Cost Method)

Dr. Machine A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
I year       31/12/ By Deprecation A/c*1   200
01/01 To Bank A/c   4,000 31/12/ By Balance C/d   3,800
      4,000       4,000
II year              
01/01 To Balance b/d   3,800 31/12/ By Deprecation A/c   200
        31/12/
By Balance C/d
  3,600
      3,800
      3,800
III year              
01/01 To Balance b/d   3,600 31/012/ By Deprecation A/c   200
        31/12/
By Balance C/d
  3,400
      3,600       3,600
IV year              
01/01 To Balance b/d   3,400 31/12/ By Deprecation A/c   200
        31/12/ By Balance C/d   3,200
      3,400       3,400

(Diminishing Balance Method)

Dr. Machine A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
I year       31/03/ By Deprecation A/c   200
01/01 To Bank A/c   4,000 31/03/ By Balance C/d   3,800
      4,000       4,000
II year              
01/01 To Balance b/d   3,800 31/03/ By Deprecation A/c*2   190
        31/03/
By Balance C/d
  3,610
      3,800
      3,800
III year              
01/01 To Balance b/d   3,610 31/03/ By Deprecation A/c   181
        31/03/
By Balance C/d
  3,429
      3,610       3,610
IV year              
01/01 To Balance b/d   3,429 31/03/ By Deprecation A/c   171
        31/03/ By Balance C/d   3,258
      3,429       3,429

 

 

Working note:-

*1:- Calculation of the amount of Depreciation on furniture for a year
Purchased on 1st July 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 4,000
Rate of Depreciation = 5%
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)
=4,000 X 5/100 X 6/12
Depreciation =200
Total Depreciation for the year =200

*2:- Calculation of the amount of Depreciation on furniture for a year
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 3,800
Rate of Depreciation = 5%
Period = from 01/01/ to 31/12/ i.e.12months
(from the date of purchase/Beginning balance to the end of the financial year)
=3,800 X 5/100 X 12/12
Depreciation = 190
Total Depreciation for the year =190
In the Written Down Method or Diminishing Balance Method, the opening value of the asset in the same year will be taken for the calculation of the amount of Depreciation.

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 18 Chapter No 14 - T.S. Grewal 11 Class

T.S. Grewal’s Double Entry Book Keeping

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