Question No 25 Chapter No 13 - USHA Publication 11 Class

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 – USHA :-

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

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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

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*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

This is all about the Question No 25 Chapter No 13 – USHA

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Depreciation | Meaning | Methods | Examples

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