Question No 27 Chapter No 12 – D.K Goal 11 Class

Question No 27 Chapter No 12

Question No 27 Chapter No 12

Free Accounting book Solution - Class 11 and Class 12

27.Binny Textiles Ltd. which depreciates its machinery at 20% p.a. on diminishing balance method, purchased a machine for 6,00,000 on 1st October, 2010. It closes its books on 31st March every year. On 1st January, 2012, it purchased another machine for 1,50,000. On 1st December, 2012, one-third of the machinery purchased on 1st October, 2010 was sold for 80,000.
You are required to prepare Machinery A/c and Provision for Depreciation A/c for the relevant years.

The solution of Question No 27 Chapter No 12: –

Dr. Machinery A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
1st Oct.2010 To Bank A/c(2,00,000+ 4,00,000)   6,00,000        
        31st Mar 2011 By Balance C/d   6,00,000
      6,00,000       6,00,000
1st Apr.2011 To Balance b/f   6,00,000        
1st Jan.2012 To Bank A/c   1,50,000 31st Mar 2012 By Balance C/d
  7,50,000
      7,50,000       7,50,000
1st Apr.2012 To Balance b/f   7,50,000 1st Dec.2012 By Provision for
Depreciation A/c
  75,200
        1st Dec.2012 By Bank A/c (Sale)   80,000
        1st Dec.2012 By Profit & Loss A/c   44,800
        31st Mar 2013 By Balance C/d(3,00,000 + 6,00,000)   5,50,000
      7,50,000       7,50,000
Dr. Provision for Depreciation  A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
        31st Mar.2011 By Depreciation A/c (40,000 + 1,60,000)   60,000
31stMar.2011 Balance c/d   60,000        
      60,000       60,000
        31st Apr 2011 By Balance b/d   60,000
31stMar.2014 Balance c/d   1,75,500 31st Mar 2012 By Depreciation A/c (36,000 + 72,000 + 7,500)   1,15,500
      1,75,500       1,75,500
31st Jul.2012 To Machinery A/c (20,000 + 36,000 +19,200)   75,200 31st Apr 2013 By Balance b/d   1,75,500
        31st Jul.2013 By Depreciation A/c (3 Months)   19,200
1st Apr.2012 To Balance b/f   2,05,600 31st Mar.2014 By Depreciation A/c (1,29,600 + 20,000)   86,100
      2,80,800       2,80,800

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 Oct. 2010 2,00,000
Less: – Amount of Depreciation charged on the year 2010-11  
2,00,000 *20%* 6/12 20,000
Amount of Depreciation charged on the year 2011-12  
1,80,000 *20%* 12/12 36,000
Amount of Depreciation charged on the year 2012-13  
1,44,000 *20%* 8/12 19,200
Book value of asset as on 1st Dec, 2012 1,24,800
Sale Price of Machinery 80,000
Loss on the sale of the asset 44,800

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 2,00,000 (1/3rd value of machinery, sold for Rs 80,000 on Dec. 01, 2012)
M2: Rs 4,00,000 (2/3rd value of machinery)

Depreciation | Meaning | Methods | Examples

Comment if you have any question.

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D K Goel – New ISC Accountancy -(Class 11 – ICSE)- Solution

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ISC Accounts 11 20 Image min 197x300 - Question No 27 Chapter No 12 - D.K Goal 11 Class
D K Goel accountancy +1 – ISC_Accounts_11_20_ImageQuestion No 42 Chapter No 11 – D.K Goal 11 Class

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