Question No 28 Chapter No 13
WDV Method and Partial Sale
28. Samar Sachdeva purchased measuring instrument for his research laboratory worth Rs 60,000 from Precision Perfect and Co., Paying only one-fourth of the amount by cheque on 1st Oct. 2017, balance payable within a month. On 31st March 2019, he disposed of half the instruments at a profit of Rs 10,000 as his further experiments would not require them. He writes off depreciation at 10%p.a. on written down the value on 31st March every year.
Show the Instruments account from the date of purchase up to the years ending 31st March 2019
The solution of Question No 28 Chapter No 13:-
| Dr. | Machine A/c | Cr. | |||||
| Date | Particulars |
J.F. | Amount | Date | Particulars |
J.F. | Amount |
| 01/10/17 | To Cash A/c | 15,000 | 31/03/18 | By Deprecation A/c*1 | 3,000 | ||
| 01/10/17 | To Precision Perfect & Co A/c | 45,000 | 31/03/18 | By Balance C/d | 57,000 | ||
| 60,000 | 60,000 | ||||||
| 01/04/18 | To Balance b/d | 57,000 | 31/03/19 | By Depreciation A/c*2 | 57,00 | ||
| 31/03/19 | To Profit/Loss A/c | 10,000 | 31/03/19 | By Bank A/c | 35,650 | ||
| 31/03/19 | By Balance C/d | 25,650 | |||||
| 67,000 | 67,000 | ||||||
Working note:-
*1:- Calculation of the amount of Depreciation on furniture for the year 2017-18
Machinery purchased on 1st Oct 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 60,000
Rate of Depreciation = 10%
Period = from 01/10/2017 to 31/03/2018 i.e. 6 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 60,000 X 10/100 X 6/ 12
Depreciation = 3,000
Total Depreciation for the year = 3,000
*2:- Calculation of the amount of Depreciation on furniture for the year 2018-19
Machinery purchased on 1st Oct 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 57,000
Rate of Depreciation = 10%
Period = from 01/04/2018 to 31/03/2019 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 57,000 X 10/100 X 12/ 12
Depreciation = 5,700
Total Depreciation for the year = 5,700
| Statement Showing profit or loss on the sale of Machinery | |
| Particulars |
Amount |
| Purchase value of machinery as on 1st October 2017 | 30,000 |
| Less: – Amount of Depreciation charged on the year 2017-18 | |
| 30,000 *10%* 6/12 | 1,500 |
| Amount of Depreciation charged on the year 2018-19 | |
| 28,500 *10%* 12/12 | 2,850 |
| Book value of an asset as on 31st March 2019 | 25,650 |
| Sale Price of Machinery | 35,650 |
| Profit on the sale of the asset | 10,000 |
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Depreciation | Meaning | Methods | Examples
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Also, Check out the solved question of all Chapters: –
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
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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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