Question No 29 Chapter No 14 – T.S. Grewal 11 Class

Question No 29 Chapter No 14

Question No 29 Chapter No 14

29. Astha Engineering Works purchased a machine on 1st July 2015 for ₹ 1,80,000 and spent ₹ 20,000 on its installation.On 1st April 2016, if purchased another machine for ₹ 2,40,000. On 1st October 2017, the machine purchased on 1st July 2015 was sold for ₹ 1,45,000. On 1st January 2018, another machine was purchased for ₹ 4,00,000 plus IGST @ 12%.Prepare the Machinery Account for the years ended 31st March 2016 to 2018 after charging Depreciation @ 10% p.a. by Diminishing Balance Method.Accounts are closed on 31st March every year.


The solution of Question No 29 Chapter No 14: –

Dr. Machinery A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/07/15 To Bank A/c   2,00,000 31/03/16 By Deprecation A/c*1   15,000
        31/03/16 By Balance C/d   1,85,000
      2,00,000       2,00,000
01/04/16 To Balance b/d   1,85,000 31/03/17 By Deprecation A/c*2   42,500
01/04/16 To Bank A/c   2,40,000 31/03/17 By Balance C/d   3,82,500
      4,25,000       4,25,000
01/04/17 To Balance b/d   3,82,500 01/10/17 By Deprecation A/c   8,325
01/01/18 To Bank A/c   4,00,000 01/10/17 By Bank A/c   1,45,000
        01/10/17 By Loss on sale of Machine A/c   13,175
        31/03/18 By Deprecation A/c*3   31,600
        31/03/18 By Balance C/d   5,84,400
      7,82,500
      7,82,500

 

Working Note:-`

*1:– Calculation of the amount of Depreciation on Machine for the year 2015-16
Purchased on 1st October 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,00,000
Rate of Depreciation = 10%
Period = from 01/07/2010 to 31/03/2011 i.e.9months
(from the date of purchase/Beginning balance to the end of the financial year)
=2,00,000 X10/100 X 9/12
Depreciation =15,000
Total Depreciation for the year = 15,000


*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 = 1,85,000
Rate of Depreciation = 10%
Period = from 01/04/2016 to 31/03/2017 i.e.12months
(from the date of purchase/Beginning balance to the end of the financial year)
=2,00,000 X10/100 X 12/12
Depreciation = 18,500
Purchased on 1st April 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,40,000
Rate of Depreciation = 10%
Period = from 01/04/2016 to 31/03/2017 i.e.12months
(from the date of purchase/Beginning balance to the end of the financial year)
=2,40,000 X10/100 X 12/12
Depreciation = 24,000
Total Depreciation for the year = 42,500

Statement Showing profit or loss on the sale of Machinery  
Particulars
Amount
Purchase value of machinery as on 1st July 2015 2,00,000
Less: – Amount of Depreciation charged on the year 2015-16  
2,00,000*10%*9/12 15,000
 Amount of Depreciation charged on the year 2016-17  
1,85,000*10%*12/12 18,500
 Amount of Depreciation charged on the year 2017-18  
1,66,500*10%*6/12 8,325
Book value of the asset as on 1st March 2017 1,58,175
Sale Price of Machinery 1,45,000
Loss on the sale of the asset 13,175

*3:- Calculation of the amount of Depreciation on furniture for the year 2015-16
Purchased on 1st April 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,16,000
Rate of Depreciation = 10%
Period = from 01/04/2010 to 31/03/2011 i.e.12months
(from the date of purchase/Beginning balance to the end of the financial year)
=2,16,000 X10/100 X 12/12
Depreciation = 21,600
Purchased on 1st January 2018
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 4,00,000
Rate of Depreciation = 10%
Period = from 01/01/2018 to 31/03/2018 i.e.3months
(from the date of purchase/Beginning balance to the end of the financial year)
=4,00,000 X10/100 X 3/12
Depreciation = 10,000
Total Depreciation for the year = 31,600


Depreciation | Meaning | Methods | Examples

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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. Grewals Double Entry Book Keeping - Question No 29 Chapter No 14 - T.S. Grewal 11 Class

T.S. Grewal’s Double Entry Book Keeping

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