Question No 20 Chapter No 14 – T.S. Grewal 11 Class

Question No 20 Chapter No 14

Question No 20 Chapter No 14

20. Babu purchased on 1st April 2016, a machine for ₹ 6,000. On 1st October 2016, he also purchased another machine for ₹ 5,000. On 1st October 2017, he sold the machine purchased on 1st April 2016 for ₹ 4,000.
It was decided that Depreciation @ 10% p.a. was to be written off every year under Diminishing Balance Method.
Assuming the accounts were closed on 31st March every year, show the Machinery Account for the years ended 31st March 2017 and 2018


The solution of Question No 20 Chapter No 14: –

Dr. Furniture A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/01/16 To Bank A/c   6,000 31/03/17 By Deprecation A/c*1   850
01/10/16 To Bank A/c   5,000 31/03/17 By Balance C/d   10,150
      11,000       11,000
01/04/17 To Balance b/d   10,150 01/10/17 By Bank A/c   4,000
        01/10/17 By Deprecation A/c   270
        01/10/17 By loss on sale on machinery A/c   1,130
        31/03/18 By Deprecation A/c*2   475
        31/03/18
By Balance C/d
  4,275
      10,150
      10,150

Wroking Note:-

*1:- Calculation of the amount of Depreciation on machinery for F/Y 2016-17
Purchased on 1st April 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 6,000
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)
=6,000 X 10/100 X 12/12
Depreciation =600
Purchased 1st October 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 5,000
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)
= 5,000 X 10/100 X 6/12
Depreciation = 250
Total Depreciation for the year =850
*2:- Calculation of the amount of Depreciation on machinery for F/Y 2017-18
Purchased 1st October 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 4,750
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)
=4,750 X 10/100 X 12/12
Depreciation =475
Total Depreciation for the year =1,015


Statement Showing profit or loss on the sale of Machinery  
Particulars
Amount
Book value of machinery as on 1st April 2016 when it was purchased 6,000
Less: – Amount of Depreciation charged on the year 2016-17  
6,000*10%*12/12 600
 Amount of Depreciation charged on the year 2017-18  
         5,400*10%*6/12   270
Book value of the asset as on 1st October 2017 5,130
Sale Price of Machinery 4,000
Loss on the sale of the asset 1,130





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

T.S. Grewal’s Double Entry Book Keeping

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