# Question No 33 Chapter No 13 – USHA Publication 11 Class

Q-33 - CH-13 - USHA +1 Book 2020 - Solution

Question No 33 Chapter No 13

WDV Method and Partial Sale

33. Sunrise Ltd. Had purchased machinery on 1st April, 2016 for Rs 5,00,000. on 1st April 2018, the company sold a part of machinery bought on 1st April, 2016 costing Rs 1,00,000 for Rs 80,000 and selling expenses amounting to Rs 2,000. Subsequently, on 1st October, in the same year, the company bought new machinery for Rs 58,000. installation charges incurred were Rs 2,000. the company depreciation @10% per annum on Diminishing Balance Method and the accounts are closed on 31st March each year Show the machinery account are closed for the period of 2016-17 to 2018-19

The solution of Question No 33 Chapter No 13:-

 Dr. Machinery A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 01/04/16 To Bank A/c 5,00,000 31/03/17 By Deprecation A/c*1 50,000 31/03/17 By Balance C/d 4,50,000 5,00,000 5,00,000 01/04/17 To Balance b/d 4,50,000 31/03/18 By Depreciation A/c*2 45,000 31/03/18 By Balance C/d 4,05,000 4,50,000 4,50,000 01/04/18 To Balance b/d 4,05,000 01/04/18 By Bank A/c 78,000 01/10/18 To Bank A/c 60,000 01/04/18 By Profit/Loss A/c 3,000 31/03/18 By Depreciation A/c*3 35,400 31/03/18 By Balance C/d 3,48,600 4,65,000 4,65,000

Working note:-

*1:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Machinery purchased on 1st April 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 5,00,000
Rate of Depreciation = 10%
Period = from 01/04/2016 to 31/03/2017 i.e.12 months
(from the date of purchase/Beginning balance to end of the financial year)
= 5,00,000 X 10/100 X 9/ 12
Depreciation = 50,000
Total Depreciation for the year = 50,000

*2:- Calculation of the amount of Depreciation on furniture for the year 2017-18
Machinery purchased on 1st April 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 4,50,000
Rate of Depreciation = 10%
Period = from 01/04/2016 to 31/03/2017  i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 4,50,000 X 10/100 X 12/ 12
Depreciation = 45,000
Total Depreciation for the year = 45,000

 Statement Showing profit or loss on the sale of Machinery Particulars Amount Purchase value of machinery as on 1st July, 2016 1,00,000 Less: – Amount of Depreciation charged on the year 2016-17 1,00,000 *10%* 12/12 10,000 Amount of Depreciation charged on year 2017-18 18,500 *10%* 12/12 9,000 Book value of the asset as on 1st April 2018 81,000 Add: – Selling expenses 2,000 Sale Price of Machinery 80,000 Profit on the sale of the asset 3,000

*3:- Calculation of the amount of Depreciation on furniture for the year 2018-19
Machinery purchased on 1st April 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 3,24,000
Rate of Depreciation = 10%
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)
= 3,24,000 X 10/100 X 12/ 12
Depreciation = 32,400
Machinery purchased on 1st Oct 2018
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 60,000
Rate of Depreciation = 10%
Period = from 01/10/2018 to 31/03/2019 i.e. 6 months
(from the date of purchase/Beginning balance to end of the financial year)
= 60,000 X 10/100 X 6/ 12
Depreciation = 3,000
Total Depreciation for the year = 3,000

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)