# Question No 33 Chapter No 12 – D.K Goal 11 Class

Question No 33 Chapter No 12

33. On 1st June, 2017, Kedarnath Ltd. purchased a machinery for 27,00,000. Depreciation is provided @ 10% p.a. on diminishing balance method and the books are closed on 31st March each year. On 1st October, 2019, a part of the machinery purchased on 1st June, 2017 for 6,00,000 was sold for 3,50,000 and on the same date another machinery was purchased for 8,00,000. You are required to show (i) Machinery A/c, (ii) Provision for Dep. A/c, and (iii) Machinery Disposal A/c.

## The solution of Question No 33 Chapter No 12: –

 Dr. Plant A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 1st Jun.2017 To Bank A/c (6,00,000 + 21,00,000) 27,00,000 31st Mar 2018 By Balance C/d 27,00,000 27,00,000 27,00,000 1st Apr.2018 To Balance b/f 27,00,000 31st Mar 2019 By Balance C/d 27,00,000 27,00,000 27,00,000 1st Apr.2019 To Balance b/f 27,00,000 31st Oct 2019 By Plant Disposal A/c 6,00,000 1st Oct.2019 To Bank A/c 8,00,000 31st Mar 2020 By Balance C/d 29,00,000 35,00,000 35,00,000
 Dr. Machinery Disposal A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 1st Oct 2019 To Machinery A/c 6,00,000 1st Oct 2019 By Provision for Depreciation A/c 1,29,750 1st Oct 2019 By Bank A/c (Sale) 3,50,000 1st Oct 2019 By Profit & Loss A/c 1,20,250 6,00,000 6,00,000
 Dr. Provision for Depreciation  A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 31st Mar 2018 By Depreciation A/c (50,000 + 1,75,000) 2,25,000 31stMar.2017 Balance c/d 2,25,000 2,25,000 2,25,000 31st Apr 2018 By Balance b/d 2,25,000 31st Mar.2018 Balance c/d 4,72,500 31st Mar 2018 By Depreciation A/c (55,000 + 1,92,500) 2,47,500 4,72,500 4,72,500 31stOct.2019 To Plant A/c (13,500 + 18,000 +19,000) 1,29,750 31st Apr 2018 By Balance b/d 4,72,500 1st Oct 2018 By Depreciation A/c (6 Months) 24,750 31stMar.2020 To Balance b/f 5,80,750 31st Mar.2019 By Depreciation A/c (1,02,000 + 42,000 + 10,000) 2,13,250 7,10,500 7,10,500

Working Note:
Calculation of Profit or Loss on Sale M1

 Statement Showing the Profit and loss on the sale of Plant Particulars Amount Machinery Purchase on of Equipment as on 1st Jun. 2017 6,00,000 Less: – Amount of Depreciation charged on the year 2017-18 6,00,000 *10%* 10/12 50,0000 Amount of Depreciation charged on the year 2018-19 5,50,000 *10%* 12/12 55,000 Amount of Depreciation charged on the year 2019-20 4,95,000 *10%* 6/12 24,750 Book value of asset as on 1st Oct, 2019 4,70,250 Sale Price of Machinery 3,50,000 Loss on the sale of the asset 1,20,250

Note: In order to make an easy calculation, machinery purchased on June 01, 2010, has been divided into two parts i.e. M1 and M2.
Thus, M1: Rs 6,00,000 (sold for Rs 3,50,000 on Oct. 01, 2012)
M2: Rs 21,00,000

Depreciation | Meaning | Methods | Examples

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