Question No 33 Chapter No 14 – T.S. Grewal 11 Class

Question No 33 Chapter No 14

Question No 33 Chapter No 14

33. On 1st October 2011, X Ltd. purchased machinery for ₹ 2,50,000. A part of the machinery which was purchased for ₹ 20,000 on 1st October 2011 became obsolete and was disposed of on 1st January 2014 (having a book value ₹ 17,100 on 1st April 2013) for ₹ 2,000. Depreciation is charged @ 10% annually on written down value. Prepare Machinery Disposal Account and also show your workings. The books being closed on 31st March of every year.
The solution of Question No 33 Chapter No 14: –

Dr. Machinery A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/10/11 To Balance b/d   2,50,000 31/03/12 By Deprecation A/c*1   12,500
        31/03/12 By Balance C/d   2,37,500
      2,50,000       2,50,000
01/04/12 To Balance b/d   2,37,500 31/03/13 By Deprecation A/c*2   23,750
        31/03/13 By Balance C/d   2,16,750
      2,37,500       2,37,500
01/04/13 To Balance b/d   2,16,750 01/12/14 By Machinery Disposal A/c   17,100
        31/03/14 By Deprecation A/c   19,665
        31/03/14 By Balance C/d   1,76,985
      2,13,750       2,13,750

 

Dr. Machinery Disposal Account Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/01/14 To Machinery A/c   20,000 01/01/14 By Provision for Depreciation A/c   4,183
        01/01/14 By Bank A/c   13,817
        01/01/14 By Loss on sale of Machinery A/c
  2,000
      20,000       20,000

 

 

Working Note:-

*1:- Calculation of the amount of Depreciation on furniture for the year 2011-12
Purchased on 1st October 2011
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,37,500
Rate of Depreciation = 10%
Period = from 01/04/2012 to 31/03/2013 i.e.12months
(from the date of purchase/Beginning balance to the end of the financial year)
=2,37,500 X10/100 X 12/12
Depreciation = 23,750
Total Depreciation for the year = 23,750

*2:- Calculation of the amount of Depreciation on furniture for the year 2012-13
Purchased on 1st October 2011
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,50,000
Rate of Depreciation = 10%
Period = from 01/10/2011 to 31/03/2012 i.e.6months
(from the date of purchase/Beginning balance to the end of the financial year)
=2,50,000 X10/100 X 12/12
Depreciation = 12,500
Total Depreciation for the year = 12,500

Statement Showing profit or loss on the sale of Machinery  
Particulars
Amount
Purchase value of machinery as on 1st October 2011 20,000
Less: – Amount of Depreciation charged on the year 2011-12  
20,000*10%*6/12 1,000
 Amount of Depreciation charged on the year 2012-13  
19,000*10%*12/12 1,900
Amount of Depreciation charged on the year 2013-14  
17,100*10%*9/12 1,283
Book value of an asset as on 1st December 2017 15,817
Sale Price of Machinery 2,000
Loss on the sale of the asset 13,817





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

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T.S. Grewals Double Entry Book Keeping - Question No 33 Chapter No 14 - T.S. Grewal 11 Class

T.S. Grewal’s Double Entry Book Keeping

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