# Question No 26 Chapter No 13 – USHA Publication 11 Class 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)