Question No 21 Chapter No 14 - T.S. Grewal 11 Class

Question No 21 Chapter No 14

21. Kaushal Traders purchased second-hand machinery on 1st April 2015 for ₹ 23,000 and spent ₹ 2,000 on its repair. It was decided to depreciate the machinery @ 20% every year on 31st March at Diminishing Balance Method.
Prepare the Machinery Account from years ended 31st March 2016 to 2018 and show Profit or Loss as it was sold on 31st March 2018 for ₹ 10,800.

The solution of Question No 21 Chapter No 14: –

Dr.	Furniture A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
01/01/15	To Bank A/c		25,000	31/03/16	By Deprecation A/c		5,000
				31/03/16	By Balance C/d		20,000
			25,000				25,000
01/04/16	To Balance b/d		20,000	31/03/17	By Deprecation A/c		4,000
				31/03/17	By Balance C/d		16,000
			20,000				20,000
01/04/17	To Balance b/d		16,000	31/03/18	By Deprecation A/c		3,200
				31/03/18	By Bank A/c		10,800
				31/03/18	By Loss on sale of Machinery A/c		2,000
			16,000				16,000

Working Note:-

Statement Showing profit or loss on the sale of Machinery
Particulars	Amount
Book value of machinery as on 1st April 2015 when it was purchased	25,000
Less: – Amount of Depreciation charged on the year 2015-16
25,00020%12/12	5,000
Amount of Depreciation charged on the year 2016-17
20,00020%12/12	4,000
Amount of Depreciation charged on the year 2017-18
16,00020%12/12	3,200
Book value of the asset as on 1st October 2017	12,800
Sale Price of Machinery	10,800
Loss on the sale of the asset	2,000

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