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Question No 23 Chapter No 13
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Depreciation on Written Down Value
23. On 1st April 2015, Bhola Nath & Sons purchased a machine costing Rs 1,00,000. its working life is 10 years. It has ben decided to depreciate it at rate of 20% p.a. on the diminishing balance method. Show the machinery Account for first three years, Books are closed on 31st March each year.
The solution of Question No 23 Chapter No 13:-
| Dr. | Machine A/c | Cr. | |||||
| Date | Particulars | J.F. | Amount | Date | Particulars | J.F. | Amount |
| 01/04/15 | To Cash A/c | 1,00,000 | 31/03/16 | By Deprecation A/c*1 | 20,000 | ||
| 31/03/16 | By Balance C/d | 80,000 | |||||
| 1,00,000 | 1,00,000 | ||||||
| 01/04/16 | To Balance b/d | 80,000 | 31/03/17 | By Depreciation A/c*2 | 16,000 | ||
| 31/03/17 | By Balance C/d | 64,000 | |||||
| 80,000 | 80,000 | ||||||
| 01/04/17 | To Balance b/d | 64,000 | 31/03/18 | By Deprecation A/c*3 | 12,800 | ||
| 31/03/19 | By Balance C/d | 51,200 | |||||
| 64,000 | 64,000 | ||||||
Working note:-
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*1:- Calculation of the amount of Depreciation on furniture for the year 2015-16
Machinery purchased on 1st Apr 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,00,000
Rate of Depreciation = 20%
Period = from 01/04/2015 to 31/03/2016 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 1,00,000 X 20/100 X 12/ 12
Depreciation = 20,000
Total Depreciation for the year = 20,000
*2:– Calculation of the amount of Depreciation on furniture for year 2016-17
Machinery purchased on 1st Apr 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 80,000
Rate of Depreciation = 20%
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)
= 80,000 X 20/100 X 12/ 12
Depreciation = 16,000
Total Depreciation for the year = 16,000
*3:- Calculation of the amount of Depreciation on furniture for the year 2018-19
Machinery purchased on 1st Apr 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 64,000
Rate of Depreciation = 20%
Period = from 01/04/2017 to 31/03/2018 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 64,000 X 10/100 X 12/ 12
Depreciation = 12,800
Total Depreciation for the year = 12,800
Depreciation | Meaning | Methods | Examples
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Also, Check out the solved question of all Chapters: –
Chapter No. 2 – Theory Base of Accounting
Chapter No. 3 – Vouchers and transactions
Chapter No. 4 – Journal
Chapter No. 5 – Ledger
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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
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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)