Question No 26 Chapter No 13 – USHA Publication 11 Class

Question No 26 Chapter No 13

Question No 26 Chapter No 13

Comparison of Methods of Depreciation

26. On 1st April 2015, machine was bought by Manider Kaur for Rs 1,00,000. its life is estimated at 4 years. Depreciation is to be written off at 40% p.a. on the diminishing balance method. Show the machinery Account for four years, assuming that the machine is sold as scrap on 31st March, 2019 for Rs 20,000. books are closed on 31st March

The solution of Question No 26 Chapter No 13:-  

Dr. Machine A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/04/15 To Cash A/c   1,00,000 31/03/16 By Deprecation A/c*1   40,000
        31/03/16 By Balance C/d   60,000
      1,00,000       1,00,000
01/04/16 To Balance b/d   60,000 31/03/17 By Depreciation A/c   24,000
        31/03/17 By Balance C/d   36,000
      60,000       60,000
01/04/17 To Balance b/d   36,000 31/03/18 By Deprecation A/c   14,400
        31/03/18 By Balance C/d   21,600
      36,000       36,000
01/04/18 To Balance b/d   21,600 31/03/19 By Deprecation A/c   8,640
31/03/19 To Profit/loss A/c   7,040 31/03/19 By Bank A/c   20,000
      28,640       28,640

 

Working note:-

*1:- Calculation of the amount of Depreciation on furniture for the year 2015-16
Machinery purchased on 1st Apr 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,00,000
Rate of Depreciation = 40%
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)
= 1,00,000 X 40/100 X 12/ 12
Depreciation = 40,000
Total Depreciation for the year = 40,000

 

*2:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Machinery purchased on 1st Apr 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 60,000
Rate of Depreciation = 40%
Period = from 01/10/2016 to 31/03/2017  i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 60,000 X 40/100 X 12/ 12
Depreciation = 24,000
Total Depreciation for the year = 24,000

*3:- Calculation of the amount of Depreciation on furniture for the year 2017-18
Machinery purchased on 1st Apr 2014
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 36,000
Rate of Depreciation = 40%
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)
= 36,000 X 40/100 X 12/ 12
Depreciation = 14,400
Total Depreciation for the year = 14,400

*4:- Calculation of the amount of Depreciation on furniture for the year 2018-19
Machinery purchased on 1st Apr 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 21,600
Rate of Depreciation = 40%
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)
= 21,600 X 40/100 X 12/ 12
Depreciation = 8,640
Total Depreciation for the year = 8,640

Statement Showing profit or loss on the sale of Machinery  
Particulars
Amount
Purchase value of machinery as on 1st April 2015 1,00,000
Less: – Amount of Depreciation charged on the year 2015-16  
1,00,000*40%* 12/12 40,000
 Amount of Depreciation charged on the year 2016-17  
60,000*40%*12/12 24,000
Amount of Depreciation charged on the year 2017-18  
36,000*40%*12/12 14,400
 Amount of Depreciation charged on the year 2018-19  
21,600 *40%*12/12 8,640
Book value of an asset as on 31st March 2019 12,960
Sale Price of Machinery 20,000
Profit on the sale of the asset 7,040

 

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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