# Question No 26 Chapter No 12 – D.K Goal 11 Class

Q-26 - CH-12 - D.K Goal +1 Book 2020 - Solution

Question No 26 Chapter No 12

26. On 1st April 2012, Banglore Silk Ltd. purchased machinery for 20,00,000. It provides depreciation at 10% p.a. on the Written Down Value Method and closes its books on 31st March every year. On 1st July 2014, a part of the machinery purchased on 1st April 2012 for 4,00,000 was sold for 3,20,000. On 1st November 2014, new machinery was purchased for 4,80,000. You are required to prepare Machinery Account, Depreciation Account, and Provision for Depreciation Account for three years ending 31st March 2015.

## The solution of Question No 26 Chapter No 12: –

 Dr. Plant A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 1st Apr.2012 To Bank A/c(4,00,000+ 16,00,000) 20,00,000 31st Mar 2013 By Balance C/d 20,00,000 20,00,000 20,00,000 1st Apr.2013 To Balance b/f 20,00,000 31st Mar 2014 By Balance C/d 20,00,000 20,00,000 20,00,000 1st Apr.2014 To Balance b/f 12,00,000 1st Jul.2014 By Provision forDepreciation A/c 84,100 1st Jun.2014 To Profit & Loss A/c 4,100 1st Jul.2014 By Bank A/c (Sale) 3,20,0000 1stNov.2014 To Bank A/c 4,80,000 31st Mar 2012 By Balance C/d(3,00,000 + 6,00,000) 20,80,000 24,81,100 24,81,100
 Dr. Depreciation A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 31stMar2013 To Provision for Depreciation A/c 2,00,000 31st Mar 2013 By Profit & Loss A/c 2,00,000 2,00,000 2,00,000 31stMar.2014 To Provision for Depreciation A/c 1,80,000 31st Mar 2014 By Profit & Loss A/c 1,80,000 1,80,000 1,80,000 1st Apr.2015 To Provision for Depreciation A/c 1,57,700 1,57,700 1,57,700

 Dr. Provision for Depreciation  A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 31st Mar.2013 By Depreciation A/c (40,000 + 1,60,000) 2,00,000 31stMar.2013 Balance c/d 2,00,000 2,00,000 2,00,000 31st Apr 2013 By Balance b/d 2,00,000 31stMar.2014 Balance c/d 3,80,000 31st Mar 2014 By Depreciation A/c (36,000 + 1,44,000) 1,80,000 3,80,000 3,80,000 31st Jul.2011 To Machinery A/c (40,000+ 36,000 + 8,100) 84,000 31st Apr 2014 By Balance b/d 3,80,000 31st Jul.2014 By Depreciation A/c (3 Months) 8,100 1st Apr.2012 To Balance b/f 4,53,600 31st Mar.2015 By Depreciation A/c (1,29,600 + 20,000) 1,49,600 5,57,700 5,57,700

Working Note:
Calculation of Profit or Loss on Sale M1

 Statement Showing profit or loss on the sale of Machinery Particulars Amount Machinery Purchase on of Equipment as on 1st Apr. 2012 4,00,000 Less: – Amount of Depreciation charged on the year 2012-13 4,00,000 *10%* 12/12 40,000 Amount of Depreciation charged on the year 2013-14 3,60,000 *10%* 12/12 36,000 Amount of Depreciation charged on the year 2014-15 3,24,000 *10%* 3/12 8,100 Book value of asset as on 30st Jul, 2014 3,15,900 Sale Price of Machinery 3,20,000 Loss on the sale of the asset 4,100

Note: In order to make easy calculation, machinery purchased on Apr. 01, 2012 has been divided into two parts i.e. M1 and M2.
Thus,
M1: Rs 4,00,000 (sold for Rs 3,20,000 on July 01, 2014)
M2: Rs 16,00,000

Depreciation | Meaning | Methods | Examples

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