Question No 25 Chapter No 14 - T.S. Grewal 11 Class

Question No 25 Chapter No 14

25. A Machinery was purchased for ₹ 1,80,000 on 1st July, 2015. Depreciation was charged annually @ 10% on Diminishing Balance Method. 1/4th of this Machinery was sold on 1st October, 2017 for 36,000. Prepare Machinery A/c from the year ended 31st March, 2016 to 2018, if the books are closed on 31st March every year.

The solution of Question No 25 Chapter No 14: –

Dr.	Machinery A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
01/07/15	To Bank A/c		1,80,000	31/03/16	By Deprecation A/c*1		13,500
				31/03/16	By Balance C/d		1,66,500
			1,80,000				1,80,000
01/04/16	To Balance b/d		1,66,500	31/03/17	By Deprecation A/c		16,650
				31/03/17	By Balance C/d		1,49,850
			1,66,500				1,66,500
01/04/17	To Balance b/d		1,49,850	31/10/17	By Deprecation A/c		1,873
01/10/17	To Profit on sale of Machinery A/c		410	31/10/17	By Bank A/c		36,000
				31/03/18	By Deprecation A/c*2		11,239
				31/03/18	By Balance C/d		1,01,148
			1,50,260				1,50,260

Working Note:-

*1:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Purchased on 1st July 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,80,000
Rate of Depreciation = 10%
Period = from 01/07/2016 to 31/03/2017 i.e.9months
(from the date of purchase/Beginning balance to the end of the financial year)
=1,80,000 X10/100 X 9/12
Depreciation =13,500
Total Depreciation for the year = 2,300

Statement Showing profit or loss on the sale of Machinery
Particulars	Amount
The purchase value of machinery as on 1st July 2015 (1,80,000 *1/4) out of which 1/4 sold	45,000
Less: – Amount of Depreciation charged on the year 2015-16
45,00010%9/12	3,375
Amount of Depreciation charged on the year 2016-17
41,62510%12/12	4,162
Amount of Depreciation charged on the year 2017-18
37,46310%6/12	1,873
Book value of the asset as on 1st April 2018	35,590
Sale Price of Machinery	36,000
Profit on the sale of the asset	410

*2:- Calculation of the amount of Depreciation on furniture for the year 2017-18
purchased on 1st July 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,12,388
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)
=1,12,388 X10/100 X 12/12

Depreciation

11,239

Total Depreciation for the year

11,239

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