Question No 23 Chapter No 14 – T.S. Grewal 11 Class

Question No 23 Chapter No 14Question No 23 Chapter No 14

Question No 23 Chapter No 14

23. A company purchased machinery for ₹ 50,000 on 1st October 2015. Another machinery costing ₹10,000 was purchased on 1st December 2016. On 31st March 2018, the machinery purchased in 2015 was sold at a loss of ₹ 5,000. The company charges depreciation @ 15% p.a. on Diminishing Balance Method. Accounts are closed on 31st March every year. Prepare the Machinery Account for 3 years.


The solution of Question No 23 Chapter No 14: –

Dr. Machinery A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/10/15 To Bank A/c   50,000 31/03/16 By Deprecation A/c*1   3,500
        31/03/16 By Balance C/d   46,250
      50,000       50,000
01/04/16 To Balance b/d   31,500 31/03/17 By Deprecation A/c*2   7,438
01/12/16 To Bank A/c   10,000 31/03/17 By Balance C/d   48,812
      56,250       56,250
01/04/17 To Balance b/d   48,812 31/03/18 By Deprecation A/c*3   7,322
        31/03/18 By Bank A/c   28,415
        31/03/18 By loss on the sale of the Machinery   5,000
        31/03/18 By Balance C/d   8,075
      48,812
      48,812

Working Note:-

*1:- Calculation of the amount of Depreciation on furniture for the year 2015-16
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 50,000
Rate of Depreciation = 15%
Period = from 01/10/2015 to 31/03/2016 i.e.6months
(from the date of purchase/Beginning balance to the end of the financial year)
=50,000 X1 5/100 X 6/12
Depreciation =3,750
Total Depreciation for the year =3,750

*2:- Calculation of the amount of Depreciation on furniture for the year 2015-16
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 46,250
Rate of Depreciation = 15%
Period = from 01/03/2016 to 31/03/2017 i.e.12months
(from the date of purchase/Beginning balance to the end of the financial year)
=46,250 X1 5/100 X 12/12

Depreciation 6,938

Purchased on 1st December 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 10,000
Rate of Depreciation = 15%
Period = from 01/12/2016 to 31/03/2017 i.e.4months
(from the date of purchase/Beginning balance to the end of the financial year)
=10,000 X1 5/100 X 4/12

Depreciation 500
Total Depreciation for the year 7,438

*3:- Calculation of the amount of Depreciation on furniture for the year 2017-18

Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 39,315
Rate of Depreciation = 15%
Period = from 01/03/2016 to 31/03/2017 i.e.12months
(from the date of purchase/Beginning balance to the end of the financial year)
=39,315 X1 5/100 X 12/12

Depreciation 5,897

Purchased on 1st December 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 9,500
Rate of Depreciation = 15%
Period = from 01/06/2017 to 31/03/2018 i.e.12 months
(from the date of purchase/Beginning balance to the end of the financial year)
=9,500 X 15/100 X 4/12

Depreciation 1,425
Total Depreciation for the year 7,322

 

Statement Showing profit or loss on the sale of Machinery  
Particulars
Amount
Book value of machinery as on 1st October 2015 when it was purchased 50,000
Less: – Amount of Depreciation charged on the year 2015-16  
50,000*15%*6/12 3,750
 Amount of Depreciation charged on the year 2016-17  
46,250*15%*12/12 6,938
 Amount of Depreciation charged on the year 2017-18  
39,315*15%*12/12 2,835
Book value of the asset as on 1st March 2018 33,415
Sale Price of Machinery 28,415
loss on the sale of the asset 5,000





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

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T.S. Grewals Double Entry Book Keeping - Question No 23 Chapter No 14 - T.S. Grewal 11 Class

T.S. Grewal’s Double Entry Book Keeping

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