Question No 22 Chapter No 13

Depreciation on Written Down Value

22. On 1st April 2016, Manmeet Singh purchased machine costing Rs 50,000. Depreciation is provided at the rate of 10%p.a. on written down value method at the end of each year.Prepare Machinery Account for three years. Books are closed on 31stMarch.

The solution of Question No 22 Chapter No 13:-

 Dr. Machine A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 01/04/16 To Cash A/c 50,000 31/03/17 By Deprecation A/c*1 5,000 31/03/17 By Balance C/d 45,000 50,000 50,000 01/04/17 To Balance b/d 45,000 31/03/18 By Depreciation A/c*2 4,500 31/03/17 By Balance C/d 4,250 45,000 45,000 01/04/18 To Balance b/d 40,500 31/03/19 By Deprecation A/c*3 4,050 31/03/19 By Balance C/d 36,450 40,500 40,500

Working note:-

*1:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Machinery purchased on 1st Apr 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 50,000
Rate of Depreciation = 10%
Period = from 01/04/2016 to 31/03/2017 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 50,000 X 10/100 X 12/ 12
Depreciation = 5,000
Total Depreciation for the year = 5,000

*2:– Calculation of the amount of Depreciation on furniture for year 2017-18
Machinery purchased on 1st Apr 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 45,000
Rate of Depreciation = 10%
Period = from 01/10/2016 to 31/03/2017 i.e. 6 months
(from the date of purchase/Beginning balance to end of the financial year)
= 45,000 X 10/100 X 12/ 12
Depreciation = 4,500
Total Depreciation for the year = 4,500

*3:- Calculation of the amount of Depreciation on furniture for the year 2018-19
Machinery purchased on 1st Apr 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 40,500
Rate of Depreciation = 10%
Period = from 01/04/2018 to 31/03/2019 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 40,500 X 10/100 X 12/ 12
Depreciation = 4,050
Total Depreciation for the year = 4,050

Depreciation | Meaning | Methods | Examples

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

Chapter No. 1 – Introduction

Chapter No. 2 – Theory Base of Accounting

Chapter No. 3 – Vouchers and transactions

Chapter No. 4 – Journal

Chapter No. 5 – Ledger

Chapter No. 6 – Cash Book

Chapter No. 7 – Other Subsidiary Books

Chapter No. 8 – Journal Proper

Chapter No. 9 – Trial Balance

Chapter No. 10 – Bank Reconciliation Statement

Chapter No. 11 – Depreciation

Chapter No. 12 – Provisions and Reserves

Chapter No. 13 – Bills of Exchange

Chapter No. 14 – Rectification of Errors

Chapter No. 15 – Financial Statements – (Without Adjustments)

Chapter No. 16 – Financial Statements – (With Adjustments)