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

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: –

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

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

*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

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 | 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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