# Question No 31 Chapter No 14 – T.S. Grewal 11 Class

Question No.31 - Chapter No.14- T.S. Grewal +1 Book 2019-Solution

Question No 31 Chapter No 14

31. Shakti Cements purchased on 1st April, 2015 a plant for ₹ 80,000. On 1st July, 2016, it purchased additional plant costing ₹ 48,000. On 1st December, 2017, the plant purchased on 1st April, 2015 was sold for ₹ 42,000 plus IGST @ 12% and on the same date a fresh plant was purchased for ₹ 75,000 plus CGST and SGST @ 6% each. Depreciation is provided at 10% p.a. on the Diminishing Balance Method. Accounts are closed on 31st March each year. Show the plant Account for 3 years (along with working notes).

The solution of Question No 31 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 80,000 31/03/16 By Deprecation A/c 8,000 31/03/16 By Balance C/d 72,000 80,000 80,000 01/04/16 To Balance b/d 72,000 31/03/17 By Deprecation A/c*1 10,800 01/07/16 To Bank A/c 48,000 31/03/17 By Balance C/d 1,09,200 1,20,000 1,20,000 01/04/17 To Balance b/d 1,09,200 01/12/17 By Deprecation A/c 4,320 01/12/17 To Bank A/c 75,000 01/12/17 By Bank A/c 42,000 01/12/17 By Loss on sale of Machine A/c 18,480 31/03/18 By Deprecation A/c*2 6,940 31/03/18 By Balance C/d 1,12,460 1,84,200 1,84,200

Working Note:-`

*1:– Calculation of the amount of Depreciation on Machine for the year 2016-17
Purchased on 1st April 2015

Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 72,000
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)
=72,000 X10/100 X 12/12
Depreciation =7,200
Purchased on 1st July 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 48,000
Rate of Depreciation = 10%
Period = from 01/07/2016 to 31/03/2017 i.e.9months
(from the date of purchase/Beginning balance to the end of the financial year)
=48,000 X10/100 X 12/12
Depreciation = 3,600
Total Depreciation for the year = 10,800

 Statement Showing profit or loss on the sale of Machinery Particulars Amount Purchase value of machinery as on 1st April 2015 80,000 Less: – Amount of Depreciation charged on the year 2015-16 80,000*10%*12/12 8,000 Amount of Depreciation charged on the year 2016-17 72,000*10%*12/12 7,200 Amount of Depreciation charged on the year 2017-18 64,800*10%*8/12 4,320 Book value of the asset as on 1st March 2017 62,480 Sale Price of Machinery 42,000 Loss on the sale of the asset 18,480

*2:- Calculation of the amount of Depreciation on furniture for the year 2017-18
Purchased on 1st July 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 44,400
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)
=44,400 X10/100 X 12/12
Depreciation = 4,440
Purchased on 1st December 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 75,000
Rate of Depreciation = 10%
Period = from 01/12/2017 to 31/03/2018 i.e.4months
(from the date of purchase/Beginning balance to the end of the financial year)
=75,000 X10/100 X 4/12
Depreciation = 2,500
Total Depreciation for the year = 6,940

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