Question No 24 Chapter No 14 - T.S. Grewal 11 Class

Question No 24 Chapter No 14

24. On 1st April 2015, machinery was purchased for ₹ 20,000. On 1st October 2016, another machine was purchased for ₹ 10,000 and on 1st April 2017, one more machine was purchased for ₹ 5,000. The firm depreciates its machinery @ 10% p.a. on the Diminishing Balance Method.What is the amount of Depreciation for the years ended 31st March 2016; 2017 and 2018? What will be the balance in Machinery Account as on 31st March 2018?

The solution of Question No 24 Chapter No 14: –

Dr.	Machinery A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
01/04/15	To Bank A/c		20,000	31/03/16	By Deprecation A/c		2,000
				31/03/16	By Balance C/d		18,000
			20,000				20,000
01/04/16	To Balance b/d		18,000	31/03/17	By Deprecation A/c*1		2,300
01/10/16	To Bank A/c		10,000	31/03/17	By Balance C/d		25,700
			28,000				28,000
01/04/17	To Balance b/d		25,700	31/03/18	By Deprecation A/c*2		3,070
01/04/17	To Bank A/c		5,000
				31/03/18	By Balance C/d		27,630
			30,700				30,700

Working Note:-

*1:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Purchased on 1st April 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 18,000
Rate of Depreciation = 10%
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)
=18,000 X1 5/100 X 12/12
Depreciation =1,800
Purchased on 1st October 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 10,000
Rate of Depreciation = 10%
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 X 10/100 X 6/12
Depreciation = 500
Total Depreciation for the year =2,300

*2:- Calculation of the amount of Depreciation on furniture for the year 2017-18
purchased on 1st April 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 16,200
Rate of Depreciation = 10%
Period = from 01/03/2017 to 31/03/2018 i.e.12months
(from the date of purchase/Beginning balance to the end of the financial year)
=16,200 X10/100 X 12/12

Depreciation

1,620

purchased on 1st October 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 9,500
Rate of Depreciation = 10%
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)
=9,500 X 15/100 X 4/12

Depreciation

950

purchased on 1st April 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 5,000
Rate of Depreciation = 10%
Period = from 01/03/2017 to 31/03/2018 i.e.12months
(from the date of purchase/Beginning balance to the end of the financial year)
=5,000 X10/100 X 12/12

Depreciation

500

Total Depreciation for the year

3,070

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