Question No 30 Chapter No 13
WDV Method and Partial Sale
30. On 1st January, 2017, Golden Transport Co. purchased a truck for Rs 4,00,000. on 1st July 2018, this truck was involved in an accident and was completely destroyed and Rs 2,00,000 were received from the insurance Company in full settlement. On the same date, another truck was purchased by the company for Rs 5,00,000. the company writes off 20%p.a. depreciation on written down value method. Account are closed each year on 31st March show the truck Account for the years 2016-17 to 2018-19
The solution of Question No 30 Chapter No 13:-
| Dr. | Truck A/c | Cr. | |||||
| Date | Particulars |
J.F. | Amount | Date | Particulars |
J.F. | Amount |
| 01/01/17 | To Cash A/c | 4,00,000 | 31/03/17 | By Deprecation A/c*1 | 20,000 | ||
| 31/03/17 | By Balance C/d | 3,80,000 | |||||
| 4,00,000 | 4,00,000 | ||||||
| 01/04/17 | To Balance b/d | 3,80,000 | 31/03/18 | By Depreciation A/c*2 | 76,000 | ||
| 31/03/18 | By Balance C/d | 3,04,000 | |||||
| 3,80,000 | 3,80,000 | ||||||
| 01/04/18 | To Balance b/d | 13,140 | 31/07/18 | By Bank A/c | 2,00,000 | ||
| 01/07/18 | To Bank A/c | 5,00,000 | 31/07/18 | By Depreciation A/c | 15,200 | ||
| 31/07/18 | By Profit/Loss A/c | 88,800 | |||||
| 31/03/18 | By Depreciation A/c*3 | 75,000 | |||||
| 31/03/18 | By Balance C/d | 4,25,000 | |||||
| 8,04,000 | 8,04,000 | ||||||
Working note:-
*1:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Machinery purchased on 1st Jan 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 4,00,0000
Rate of Depreciation = 20%
Period = from 01/01/2016 to 31/03/2017 i.e. 3 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 4,00,000 X 20/100 X 3/ 12
Depreciation = 20,000
Total Depreciation for the year = 20,000
*2:- Calculation of the amount of Depreciation on furniture for the year 2017-18
Machinery purchased on 1st Jan 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 3,80,000
Rate of Depreciation = 20%
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)
= 3,80,000 X 20/100 X 12/ 12
Depreciation = 76,000
Total Depreciation for the year = 76,000
| Statement Showing profit or loss on the sale of Machinery | |
| Particulars |
Amount |
| Purchase value of machinery as on 1st Jan 2017 | 4,00,000 |
| Less: – Amount of Depreciation charged on the year 2016-17 | |
| 4,00,000 *20%* 3/12 | 20,000 |
| Amount of Depreciation charged on the year 2017-18 | |
| 3,80,000 *20%* 12/12 | 76,000 |
| Amount of Depreciation charged on the year 2018-19 | |
| 3,04,000 *20%* 3/12 | 15,200 |
| Book value of an asset as on 31st March 2019 | 2,88,800 |
| Sale Price of Machinery | 2,00,000 |
| Profit on the sale of the asset | 88,800 |
*3:- Calculation of the amount of Depreciation on furniture for the year 2018-19
Machinery purchased on 1st Jul 2018
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 5,00,000
Rate of Depreciation = 20%
Period = from 01/07/2018 to 31/03/2019 i.e. 9 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 5,00,000 X 20/100 X 9/ 12
Depreciation = 75,000
Total Depreciation for the year = 75,000
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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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