Question No 20 Chapter No 12

Question No 20 Chapter No 12

20.On 1st April 2008, a Company purchased 6 machines for 50,000 each. Depreciation at the rate of 10% p.a. is charged on the Straight Line Method. The accounting year of the Company ends on 31st March and the depreciation is credited to a separate ‘Provision for Depreciation Account’.
On 1st October 2010, one machine was sold for 30,000 and on 1st April 2011, a second machine was sold for 24,000. You are required to prepare Machinery Account and Provision for Depreciation Account for four years ending 31st March 2012.

The solution of Question No 20 Chapter No 12: –

Dr.Machinery A/cCr.
DateParticulars
J.F.AmountDateParticulars
J.F.Amount
1st Jul.2016To Bank A/c (50,000 + 50,000 + 2,00,000) 3,00,000    
    31st Mar 2017By Balance C/d  3,00,000
   3,00,000   3,00,000
1st Apr.2017To Balance b/f 3,00,000    
    31st Mar 2018By Balance C/d
 3,00,000
   3,00,000   3,00,000
1st Apr.2018To Balance b/f 6,00,0001st Oct.2018By Provision for
Depreciation A/c
 12,500
    1st Oct.2018By Bank A/c (Sale) 30,000
    1st Oct.2018By Profit & Loss A/c 7,500
    31st Mar 2019By Balance C/d(50,000 +2,00,000) 2,50,000
   3,00,000   3,00,000
1st Apr.2019To Balance b/f 2,50,0001st Apr.2019By Provision for
Depreciation A/c
 15,000
    1st Apr.2019By Bank A/c (Sale) 24,000
    1st Apr.2019By Profit & Loss A/c 11,000
    31st Mar 2020By Balance C/d(50,000 +2,00,000)  2,00,000
   2,50,000
   2,50,000
Dr.Provision for Depreciation  A/cCr.
DateParticulars
J.F.AmountDateParticulars
J.F.Amount
    31st Mar.2017By Depreciation A/c (5,000 + 5,000 + 20,000) 30,000
31stMar.2017Balance c/d 30,000    
   30,000   30,000
    31st Apr 2017By Balance b/d 30,000
31stMar.2018Balance c/d 60,00031st Mar 2018By Depreciation A/c (5,000 + 5,000 + 20,000) 30,000
   60,000   60,000
1st Oct.2019To Balance b/f(5,000 + 5,000 + 2,500) 12,50031st Apr 2018By Balance b/d 60,000
    1st Oct.2019By Depreciation A/c (M1) 2,500
1st Apr.2018To Balance b/f 75,0001st Jan.2019By Depreciation A/c (for
10 months)
 25,000
   87,500   87,500
1st Apr.2019To Balance b/f(5,000 + 5,000 + 5,000) 15,0001st Apr.2019By Balance b/d 75,000
    1st Apr.2019By Depreciation A/c 20,000
1st Apr.2020To Balance b/f 80,000
    
   95,000
   95,000

Working Note:
Calculation of Profit or Loss on Sale M1

Statement Showing profit or loss on the sale of Machinery
Particulars
Amount
Machinery Purchase on of Equipment as on 1st Apr. 201650,000
Less: – Amount of Depreciation charged on the year 2016-17 
50,000 *10%* 12/125,000
Amount of Depreciation charged on the year 2017-18 
50,000 *10%* 12/125,000
Amount of Depreciation charged on the year 2018-19 
50,000 *10%* 12/122,500
Book value of asset as on 1st Oct, 201837,500
Sale Price of Machinery 30,000
Loss on the sale of the asset7,500

Calculation of Profit & Loss on Sale of M2

Statement Showing profit or loss on the sale of Machinery
Particulars
Amount
Machinery Purchase on of Equipment as on 1st Apr. 201650,000
Less: – Amount of Depreciation charged on the year 2016-17 
50,000 *10%* 12/125,000
Amount of Depreciation charged on the year 2017-18 
50,000 *10%* 12/125,000
Amount of Depreciation charged on the year 2018-19 
50,000 *10%* 12/125,000
Book value of asset as on 1st Oct, 201835,000
Sale Price of Machinery 24,000
Loss on the sale of the asset11,000

Note: For making calculation easy, Machinery purchased on April 01, 2008, has been divided into three i.e. M1, M2, and M3.
Thus,
M1: Rs 50,000 (sold for Rs 30,000 on Oct. 01, 2010)
M2: Rs 50,000 (sold for Rs 24,000 on Apr. 01, 2011)
M3: Rs 2,00,000 (includes the cost of 4 machines)

Depreciation | Meaning | Methods | Examples

Comment if you have any question.

Also, Check out the solved question of all Chapters: –

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

Check out the Accountancy Class +1 by D.K. Goal (Arya Publication) from their official Site.

ISC Accounts 11 20 Image min 197x300 - Question No 20 Chapter No 12 - D.K Goal 11 Class
D K Goel accountancy +1 – ISC_Accounts_11_20_ImageQuestion No 42 Chapter No 11 – D.K Goal 11 Class

Leave a Reply

About us

About us, we are here to improve your knowledge in all financial & Business related topics and to get better carrier opportunities. The author has about 10-year Experience in tuition Business. It is very difficult to teach a large number of students with a personal touch or in a classroom. 

Animation's Resource websites

All Icons and images used on my website were downloaded from the following website please go and download free:-

close