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Question No 27 Chapter No 14 – T.S. Grewal 11 Class

Question No 27 Chapter No 14
Question No.27 - Chapter No.14- T.S. Grewal +1 Book 2019-Solution

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Question No 27 Chapter No 14

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27. A company purchased on 1st July 2015 machinery costing ₹ 30,000. It further purchased machinery on 1st January 2016 costing ₹ 20,000 and on 1st October 2016 costing ₹ 10,000. On 1st April 2017, one-third of the machinery installed on 1st July 2015 became obsolete and was sold for ₹ 3,000. The company follows the financial year as the accounting year. Show how the Machinery Account would appear in the books of the company if depreciation is charged @ 10% p.a. on Written Down Value Method.


The solution of Question No 27 Chapter No 14: –

Dr.Machinery A/cCr.
DateParticulars
J.F.AmountDateParticulars
J.F.Amount
01/07/15To Bank A/c 30,00031/03/16By Deprecation A/c*1 2,750
01/07/15To Bank A/c 20,00031/03/16By Balance C/d 47,250 
   50,000   50,000
01/04/16To Balance b/d 47,25031/03/17By Deprecation A/c*2 5,225
01/10/16To Bank A/c 10,00031/03/17By Balance C/d 52,025
   57,250   57,250
01/04/17To Balance b/d 52,52531/01/17By Bank A/c 3,000
    31/01/17By Loss on sale of Machinery A/c 5,325
    31/03/18By Deprecation A/c*3 4,370
    31/03/18By Balance C/d 39,330
   52,025
   52,025

Working Note:-`

*1:- Calculation of the amount of  Depreciation on furniture for the year 2015-16
Purchased on 1st July 2015

Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 30,000
Rate of Depreciation = 10%
Period = from 01/07/2015 to 31/03/2016 i.e.9months
(from the date of purchase/Beginning balance to the end of the financial year)
=30,000 X10/100 X 9/12
Depreciation =2,250
Purchased on 1st January 2018
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 20,000
Rate of Depreciation = 10%
Period = from 01/01/2016 to 31/03/2016 i.e.2months
(from the date of purchase/Beginning balance to the end of the financial year)
=20,000 X10/100 X 3/12
Depreciation = 500
Total Depreciation for the year = 2,750

*2:- 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 = 27,750
Rate of Depreciation = 10%
Period = from 01/03/2016 to 31/03/2017 i.e.12months
(from the date of purchase/Beginning balance to the end of the financial year)
=30,000 X10/100 X 12/12
Depreciation = 2,775
Purchased on 1st January 2018
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 19,500
Rate of Depreciation = 10%
Period = from 01/04/2016 to 31/03/2017 i.e.2months
(from the date of purchase/Beginning balance to the end of the financial year)
=20,000 X10/100 X 12/12
Depreciation = 1,950

Purchased on 1st October 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 10,000
Rate of Depreciation = 10%
Period = from 01/10/2016 to 31/03/2017 i.e.6months
(from the date of purchase/Beginning balance to the end of the financial year)
=10,000 X10/100 X 6/12
Depreciation =500
Total Depreciation for the year = 5,225

Statement Showing profit or loss on the sale of Machinery 
Particulars
Amount
Purchase value of machinery as on 1st October 2015 (30,000 *1/3) out of which 1/4 sold10,000
Less: – Amount of Depreciation charged on the year 2015-16 
10,000*10%*9/12750
 Amount of Depreciation charged on the year 2016-17 
9,250*10%*12/12925
Book value of the asset as on 1st March 20178,325
Sale Price of Machinery 3,000
Loss on the sale of the asset5,325

 

*3:- Calculation of the amount of Depreciation on furniture for the year 2017-18
 Purchased on 1st July 2015(2/3)

Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 16,650
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)
=16,650 X10/100 X 12/12
Depreciation = 1,665
Purchased on 1st January 2018
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 17,550
Rate of Depreciation = 10%
Period = from 01/01/2018 to 31/03/2018 i.e.2months
(from the date of purchase/Beginning balance to the end of the financial year)
=17,550 X10/100 X 12/12
Depreciation = 1,755
Purchased on 1st October 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 9,500
Rate of Depreciation = 10%
Period = from 01/04/2016 to 31/03/2018 i.e.12months
(from the date of purchase/Beginning balance to the end of the financial year)
=9,500 X10/100 X 6/12
Depreciation = 950
Total Depreciation for the year = 4,370

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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

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T.S. Grewal's Double Entry Book Keeping

T.S. Grewal’s Double Entry Book Keeping

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