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

Question No.23 - Chapter No.14- T.S. Grewal +1 Book 2019-Solution

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

T.S. Grewal’s Double Entry Book Keeping