Question No 30 Chapter No 13 – USHA Publication 11 Class

Question No 30 Chapter No 13

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 Marchshow 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

Depreciation | Meaning | Methods | Examples

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Also, Check out the solved question of all Chapters: –

Chapter No. 1 – Introduction

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

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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