Question No 30 Chapter No 14 - T.S. Grewal 11 Class

Question No 30 Chapter No 14

30. A firm purchased on 1st April 2015 certain machinery for ₹ 5,82,000 and spent ₹ 18,000 on its installation. On 1st October 2015, additional machinery costing ₹ 2,00,000 was purchased. On 1st October 2017, the machinery purchased on 1st April 2015 was auctioned for ₹ 2,86,000 plus CGST and SGST @ 6% each and new machinery for ₹ 4,00,000, plus IGST @ 12% was purchased on the same date. Depreciation was provided annually on 31st March at the rate of 10% p.a. on the Written Down Value Method. Prepare the Machinery Account for the three years ended 31st March 2018.

The solution of Question No 30 Chapter No 14: –

Dr.	Machinery A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
01/04/15	To Bank A/c		6,00,000	31/03/16	By Deprecation A/c*1		70,000
01/10/15	To Bank A/c		2,00,000	31/03/16	By Balance C/d		7,30,000
			8,00,000				8,00,000
01/04/16	To Balance b/d		7,30,000	31/03/17	By Deprecation A/c*2		42,500
				31/03/17	By Balance C/d		6,57,000
			7,30,000				7,30,000
01/04/17	To Balance b/d		6,57,000	01/10/17	By Deprecation A/c		24,300
01/10/17	To Bank A/c		4,00,000	01/10/17	By Bank A/c		2,86,000
				01/10/17	By Loss on sale of Machine A/c		1,75,700
				31/03/18	By Deprecation A/c*3		37,100
				31/03/18	By Balance C/d		5,33,900
			10,57,000				10,57,000

Working Note:-`

*1:– Calculation of the amount of Depreciation on Machine for the year 2015-16
Purchased on 1st April 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 6,00,000
Rate of Depreciation = 10%
Period = from 01/04/2015 to 31/03/2016 i.e.12months
(from the date of purchase/Beginning balance to the end of the financial year)
=6,00,000 X10/100 X 12/12
Depreciation =60,000
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 01/10/2015 to 31/03/2016 i.e.6months
(from the date of purchase/Beginning balance to the end of the financial year)
=2,00,000 X10/100 X 12/12
Depreciation = 10,000
Total Depreciation for the year = 70,000

*2:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Purchased on 1st April,2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 5,40,000
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)
=5,40,000 X10/100 X 12/12
Depreciation = 54,000
Purchased on 1st October,2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,90,000
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)
=1,90,000 X10/100 X 12/12
Depreciation = 19,000
Total Depreciation for the year = 73,000

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Statement Showing profit or loss on the sale of Machinery
Particulars	Amount
Purchase value of machinery as on 1st April 2015	6,00,000
Less: – Amount of Depreciation charged on the year 2015-16
6,00,00010%12/12	60,000
Amount of Depreciation charged on the year 2016-17
5,40,00010%12/12	54,000
Amount of Depreciation charged on the year 2017-18
4,86,00010%6/12	24,300
Book value of the asset as on 1st March 2017	4,61,700
Sale Price of Machinery	2,86,000
Loss on the sale of the asset	1,75,700

*3:- Calculation of the amount of Depreciation on furniture for the year 2015-16
Purchased on 1st October 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,71,000
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)
=1,71,000 X10/100 X 12/12
Depreciation = 17,100
Purchased on 1st October 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 4,00,000
Rate of Depreciation = 10%
Period = from 01/10/2017 to 31/03/2018 i.e.6months
(from the date of purchase/Beginning balance to the end of the financial year)
=4,00,000 X10/100 X 6/12
Depreciation = 20,000
Total Depreciation for the year = 37,100

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