Question No 25 Chapter No 13 – USHA Publication 11 Class

Question No 25 Chapter No 13

Question No 25 Chapter No 13

Comparison of Methods of Depreciation

25. Alisha purchased machinery on 1st April,2014 for Rs 60,000. depreciation is written off at the rate 10% p.a. show machinery and depreciation account under both the fixed instalment and reducing instalment methods for five years. The firm closes its books on 31st March each year.

The solution of Question No 25 Chapter No 13:-  

Fixed Instalment Methods

Dr. Machine A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/04/14 To Cash A/c   60,000 31/03/15 By Deprecation A/c*1   6,000
        31/03/16 By Balance C/d   54,000
      60,000       60,000
01/04/15 To Balance b/d   54,000 31/03/16 By Depreciation A/c   6,000
        31/03/16 By Balance C/d   48,000
      54,000       54,000
01/04/16 To Balance b/d   48,000 31/03/17 By Deprecation A/c   6,000
        31/03/17 By Balance C/d   42,000
      48,000       48,000
01/04/17 To Balance b/d   42,000 31/03/18 By Deprecation A/c   6,000
        31/03/18 By Balance C/d   36,000
      42,000       42,000
01/04/18 To Balance b/d   36,000 31/03/19 By Deprecation A/c   6,000
        31/03/19 By Balance C/d   30,000
      36,000       36,000

 

Dr. Depreciation A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
31/03/15 To Machinery A/c   6,000        
        31/03/15 By Profit & Loss A/c   6,000
      6,000       6,000
31/03/16 To Machinery A/c   6,000        
        31/03/16 By Profit & Loss A/c   6,000
      6,000       6,000
31/03/17 To Machinery A/c   6,000        
        31/03/17 By Profit & Loss A/c   6,000
      6,000       6,000
31/03/18 To Machinery A/c   6,000        
        31/03/18 By Profit & Loss A/c   6,000
      6,000       6,000
31/03/19 To Machinery A/c   6,000        
        31/03/19 By Profit & Loss A/c   6,000
      6,000       6,000

Working note:-

*1:- Calculation of the amount of Depreciation on furniture for the year 2014-15
Machinery purchased on 1st Apr 2014
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 60,000
Rate of Depreciation = 10%
Period = from 01/04/2014 to 31/03/2015 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 60,000 X 10/100 X 12/ 12
Depreciation = 6,000
Total Depreciation for the year = 6,000

Reducing Instalment Methods

Dr. Machine A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/04/14 To Cash A/c   60,000 31/03/15 By Deprecation A/c*1   6,000
        31/03/16 By Balance C/d   54,000
      60,000       60,000
01/04/15 To Balance b/d   54,000 31/03/16 By Depreciation A/c*2   5,400
        31/03/16 By Balance C/d   48,600
      54,000       54,000
01/04/16 To Balance b/d   48,600 31/03/17 By Deprecation A/c*3   4,860
        31/03/17 By Balance C/d   43,730
      48,600       48,600
01/04/17 To Balance b/d   43,740 31/03/18 By Deprecation A/c*3   4,374
        31/03/18 By Balance C/d   39,366
      43,730       43,730
01/04/18 To Balance b/d   39,366 31/03/19 By Deprecation A/c*3   3,937
        31/03/19 By Balance C/d   35,429
      39,366       39,366

 

Dr. Depreciation A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
31/03/15 To Machinery A/c   6,000        
        31/03/15 By Profit & Loss A/c   6,000
      6,000       6,000
31/03/16 To Machinery A/c   5,400        
        31/03/16 By Profit & Loss A/c   5,400
      5,400       5,400
31/03/17 To Machinery A/c   4,860        
        31/03/17 By Profit & Loss A/c   4,860
      4,860       4,860
31/03/18 To Machinery A/c   4,374        
        31/03/18 By Profit & Loss A/c   4,374
      4,374       4,374
31/03/19 To Machinery A/c   3,937        
        31/03/19 By Profit & Loss A/c   3,937
      3,937       3,937

*1:– Calculation of the amount of Depreciation on furniture for the year 2014-15
Machinery purchased on 1st Apr 2014
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 60,000
Rate of Depreciation = 10%
Period = from 01/10/2014 to 31/03/2015 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 60,000 X 20/100 X 12/ 12
Depreciation = 6,000
Total Depreciation for the year = 6,000

*2:- Calculation of the amount of Depreciation on furniture for the year 2015-16
Machinery purchased on 1st Apr 2014
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 54,000
Rate of Depreciation = 10%
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)
= 54,000 X 10/100 X 12/ 12
Depreciation = 5,400
Total Depreciation for the year = 5,400

*3:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Machinery purchased on 1st Apr 2014
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 48,600
Rate of Depreciation = 10%
Period = from 01/04/2016 to 31/03/2017 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 48,600 X 20/100 X 12/ 12
Depreciation = 4,860
Total Depreciation for the year = 4,860

*4:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Machinery purchased on 1st Apr 2014
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 43,740
Rate of Depreciation = 10%
Period = from 01/04/2016 to 31/03/2017 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 43,740 X 20/100 X 12/ 12
Depreciation = 4,374
Total Depreciation for the year = 4,374

*5:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Machinery purchased on 1st Apr 2014
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 39,366
Rate of Depreciation = 10%
Period = from 01/04/2016 to 31/03/2017 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 39,366 X 20/100 X 12/ 12
Depreciation = 3,937
Total Depreciation for the year = 3,937

Depreciation | Meaning | Methods | Examples

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Also, Check out the solved question of all Chapters: –

Chapter No. 1 – Introduction

Chapter No. 2 – Theory Base of Accounting 

Chapter No. 3 – Vouchers and transactions

Chapter No. 4 – Journal

Chapter No. 5 – Ledger

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

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)

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