Question No 32 Chapter No 14 - T.S. Grewal 11 Class

Question No 32 Chapter No 14

32. Following balances appear in the books of M/s. Amrit as on 1st April 2017:

2017		Rs
1srt April	Machinery A/c	60,000
	Provision for Depreciation A/c	36,000

On 1st April 2017, they decided to dispose of machinery for ₹ 8,400 which was purchased on 1st April 2013 for ₹ 16,000.You are required to prepare the Machinery A/c, Provision for Depreciation A/c and Machinery Disposal A/c for the year ended 31st March 2018. Depreciation was charged at 10% on Cost following SLM.

The solution of Question No 32 Chapter No 14: –

Dr.	Machinery A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
01/04/17	To Balance b/d		60,000	01/04/17	By Machinery Disposal		16,000
				31/03/18	By Balance C/d		44,000
			60,000				60,000

Dr.	Provision for Depreciation Account						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
01/04/17	To Machinery Disposal (4 years)		6,400	01/04/17	By Balance b/d		36,000
31/03/18	To Balance C/d		34,000	31/03/18	By Depreciation (on Machine costing Rs 44,000)		4,400
			40,400				40,400

Dr.	Machinery Disposal Account						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
01/04/17	To Machinery A/c		16,000	01/04/17	By Provision for Depreciation A/c		6,400
				01/04/17	By Bank A/c		8,400
				01/04/17	By Loss on sale of Machinery A/c		1,200
			16,000				16,000

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Working Note:-

Statement Showing profit or loss on the sale of Machinery
Particulars	Amount
Purchase value of machinery as on 1st April 2013	16,000
Less: – Amount of Depreciation charged on the year 2013-14
16,00010%12/12	1,600
Amount of Depreciation charged on the year 2014-15	1,600
Amount of Depreciation charged on the year 2015-16	1,600
Amount of Depreciation charged on the year 2016-17	1,600
Book value of the asset as on 1st March 2017	9,600
Sale Price of Machinery	8,400
Loss on the sale of the asset	1,200

Depreciation | Meaning | Methods | Examples

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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