Question No 19 Chapter No 12

19. On July 1, 2016 Pushpak Ltd. purchased a machinery for 5,70,000 and paid 30,000 for its overhauling and installation. Depreciation is provided @ 20% p.a. on Original Cost Method and the books are closed on 31st March every year. The machine was sold on 31st January 2019 for a sum of 1,60,000. You are required to show the Machinery Account and Provision for Depreciation Account for three years.

## The solution of Question No 19 Chapter No 12: –

 Dr. Machinery A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 1st Jul.2016 To Bank A/c (10,000+ 20,000) 6,00,000 31st Mar 2017 By Balance C/d 6,00,000 6,00,000 6,00,000 1st Apr.2017 To Balance b/f 6,00,000 31st Mar 2018 By Balance C/d 6,00,000 6,00,000 6,00,000 1st Apr.2018 To Balance b/f 6,00,000 1st Jan.2019 By Provision forDepreciation A/c 3,10,000 1st Jan.2019 By Bank A/c (Sale) 1,60,000 1st Jan.2019 By Profit & Loss A/c 1,30,000 6,00,000 6,00,000
 Dr. Provision for Depreciation  A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 31st Mar.2017 By Depreciation A/c (for 9 Month) 90,000 31stMar.2017 Balance c/d 90,000 90,000 90,000 31st Apr 2017 By Balance b/d 90,000 31stMar.2018 Balance c/d 2,10,000 31st Mar 2018 By Depreciation A/c 1,20,000 2,10,000 2,10,000 31st Apr 2018 By Balance b/d 2,10,000 1st Apr.2018 To Balance b/f 3,10,000 1st Jan.2019 By Depreciation A/c (for10 months) 1,00,000 3,10,000 3,10,000

Working Note:
Calculation of Profit or Loss on Sale

 Statement Showing profit or loss on the sale of Machinery Particulars Amount Machinery Purchase on of Equipment as on 1st Jul. 2016 6,00,000 Less: – Amount of Depreciation charged on the year 2016-17 6,00,000 *20%* 9/12 90,000 Amount of Depreciation charged on the year 2017-18 6,00,000 *20%* 12/12 1,20,000 Amount of Depreciation charged on the year 2018-19 6,00,000 *20%* 10/12 1,00,000 Book value of asset as on 30st Sep, 2019 2,90,000 Sale Price of Machinery 1,60,000 Profit on the sale of the asset 1,30,000

Depreciation | Meaning | Methods | Examples

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## D K Goel – New ISC Accountancy -(Class 11 – ICSE)- Solution

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