Question No 22 Chapter No 14
22. X bought a machine for Rs 25,000 on which he spent Rs 5,000 for carriage and freight. Rs 1,000 for the brokerage of the middleman, Rs 3,500 for installation and ₹ 500 for an iron pad. The machine is depreciated @ 10% every year on the Written Down Value basis. After three years, the machine was sold to Y for Rs 30,500 and Rs 500 was paid as commission to the broker through whom the sale was effected. Find out the profit and loss on the sale of the machine.
The solution of Question No 22 Chapter No 14: –
Advertisement
Video Tag:Dr. | Machinery A/c | Cr. | |||||
Date | Particulars |
J.F. | Amount | Date | Particulars |
J.F. | Amount |
I year | |||||||
01/01/ | To Bank A/c | 35,000 | 31/12/ | By Deprecation A/c | 3,500 | ||
31/12/ | By Balance C/d | 31,500 | |||||
35,000 | 35,000 | ||||||
II year | |||||||
01/01/ | To Balance b/d | 31,500 | 31/12/ | By Deprecation A/c | 3,150 | ||
31/12/ | By Balance C/d | 28,350 | |||||
31,500 | 31,500 | ||||||
III year | |||||||
01/01/ | To Balance b/d | 28,350 | 31/12/ | By Deprecation A/c | 2,835 | ||
31/12/ | To Profit on sale on Machinery A/c | 4,485 | 31/12/ | By Bank A/c (30,500-500) | 30,000 | ||
32,835 |
32,835 |
Working Note:-
Statement Showing profit or loss on the sale of Machinery | |
Particulars |
Amount |
Book value of machinery as on 1st January when it was purchased | 35,000 |
Less: – Amount of Depreciation charged on I year | |
35,000*10%*12/12 | 3,500 |
Amount of Depreciation charged on II year | |
31,500*10%*12/12 | 3,150 |
Amount of Depreciation charged on III year | |
28,350*10%*12/12 | 2,835 |
Add: commission to the broker | 500 |
Book value of the asset as on 1st October 2017 | 26,015 |
Sale Price of Machinery | 30,500 |
Profit on the sale of the asset | 4,485 |
Advertisement
Depreciation | Meaning | Methods | Examples
Thanks, Please Like and share with your friends
Comment if you have any question.
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
Check out T.S. Grewal +1 Book 2019 @ Official Website of Sultan Chand Publication
Leave a Reply