Question No 34 Chapter No 13 – USHA Publication 11 Class

Question No 34 Chapter No 13

Question No 34 Chapter No 13

WDV Method and Partial Sale

34. Jung Traders purchased an equipment on1st July 2015, for Rs 28,000 and spends Rs 2,000 for its carriage and installation. On 1st October 2015 and on 1st Jan 2016 additional equipment were bought for Rs 40,000 and 10,000 respectively. On 31st March 2017 first day. On 30th September 2018, the second equipment was taken away at home at 60% of the value of the book. On 31st March 2019 third equipment was heavily damaged and could not fetch anything. Depreciation was charged at 20% p.a. on reducing instalment basis.
Prepare Equipment Account till March 31, 2019, with all workings, financial years being followed.

The solution of Question No 34 Chapter No 13:-  

Dr. Machinery A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/07/15 To Bank A/c   30,000 31/03/16 By Deprecation A/c*1   9,000
01/10/15 To Bank A/c   40,000        
01/01/15 To Bank A/c   10,000        
        31/03/16 By Balance C/d   71,000
      80,000       80,000
01/04/16 To Balance b/d   71,000 31/03/17 By Bank A/c   20,000
01/01/17     20,000 31/03/17 By Depreciation A/c   5,100
        31/03/17 By Profit/loss A/c   400
        31/03/17 By Depreciation A/c*2   9,100
        31/03/17 By Balance C/d   56,400
      91,000       91,000
01/04/17 To Balance b/d   56,400 31/03/18 By Depreciation A/c*3   11,280
        31/03/18 By Balance C/d   45,120
      56,400       56,400
01/04/18 To Balance b/d   45,120 30/09/18 By Drawing A/c   12,442
        30/09/18 By Deprecation A/c   2,304
        30/09/18 By Profit/loss A/c   8,294
        31/03/19 By Profit/loss A/c   4,864
        31/03/19 By Deprecation A/c*4   4,416
        31/03/19 By Balance C/d
  12,800
      45,120       45,120


Working note:-

*1:- Calculation of the amount of Depreciation on furniture for the year 2015-16
Machinery purchased on 1st Jul 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 30,000
Rate of Depreciation = 20%
Period = from 01/07/2015 to 31/03/2016 i.e.9 months
(from the date of purchase/Beginning balance to end of the financial year)
= 30,000 X 20/100 X 9/ 12
Depreciation = 4,500
Machinery purchased on 1st Oct 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 40,000
Rate of Depreciation = 20%
Period = from 01/10/2015 to 31/03/2016 i.e.6 months
(from the date of purchase/Beginning balance to end of the financial year)
= 40,000 X 20/100 X 6/ 12
Depreciation = 4,000
Machinery purchased on 1st Jan 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 10,000
Rate of Depreciation = 20%
Period = from 01/01/2015 to 31/03/2016 i.e.3 months
(from the date of purchase/Beginning balance to end of the financial year)
= 10,000 X 20/100 X 3/ 12
Depreciation = 500
Total Depreciation for the year = 9,000

Statement Showing profit or loss on the sale of Machinery  
Particulars
Amount
Purchase value of Equipment as on 1st July 2015 30,000
Less: – Amount of Depreciation charged on the year 2015-16  
30,000 *20%* 9/12 4,500
Amount of Depreciation charged on the year 2016-17  
25,500 *20%* 12/12 5,100
Book value of the asset as on 1st April 2017 20,400
Sale Price of Machinery 20,000
Loss on the sale of the asset 400

*2:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Machinery purchased on 1st Oct 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 36,000
Rate of Depreciation = 20%
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)
= 36,000 X 20/100 X 12/ 12
Depreciation = 7,200
Machinery purchased on 1st Jan 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 9,500
Rate of Depreciation = 20%
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)
= 9,500 X 20/100 X 12/ 12
Depreciation = 1,900
Total Depreciation for the year = 9,100

*3:- Calculation of the amount of Depreciation on furniture for the year 2017-18
Machinery purchased on 1st Oct 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 28,800
Rate of Depreciation = 20%
Period = from 01/04/2017 to 31/03/2018 i.e.12 months
(from the date of purchase/Beginning balance to end of the financial year)
= 28,800 X 20/100 X 12/ 12
Depreciation = 5,760
Machinery purchased on 1st Jan 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 7,600
Rate of Depreciation = 20%
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)
= 9,500 X 20/100 X 12/ 12
Depreciation = 1,520
Machinery purchased on 1st March 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 20,000
Rate of Depreciation = 20%
Period = from 01/04/2017 to 31/03/2018 i.e.12 months
(from the date of purchase/Beginning balance to end of the financial year)
= 20,000 X 20/100 X 12/ 12
Depreciation = 4,000
Total Depreciation for the year = 12,180

Statement Showing profit or loss on the sale of Machinery  
Particulars
Amount
Purchase value of Equipment as on 1st Oct 2015 40,000
Less: – Amount of Depreciation charged on the year 2015-16  
40,000 *20%* 6/12 4,000
Amount of Depreciation charged on the year 2016-17  
36,000 *20%* 12/12 7,200
Amount of Depreciation charged on the year 2017-18  
28,800 *20%* 12/12 5,760
Amount of Depreciation charged on the year 2018-19  
23,040 *20%* 6/12 2,304
Book value of an asset as on 30th September 2018 20,736
Sale Price of Machinery 12,442
Loss on the sale of the asset 8,294

*4:- Calculation of the amount of Depreciation on furniture for the year 2018-19
Machinery purchased on 1st Jan 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 6,080
Rate of Depreciation = 20%
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)
= 6,080 X 20/100 X 12/ 12
Depreciation = 1,216
Machinery purchased on 1st March 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 16,000
Rate of Depreciation = 20%
Period = from 01/04/2018 to 31/03/2019 i.e. 12 months
(from the date of purchase/Beginning balance to end of the financial year)
= 16,000 X 20/100 X 12/ 12
Depreciation = 3,200
Total Depreciation for the year = 4,416

Statement Showing profit or loss on the sale of Machinery  
Particulars
Amount
Purchase value of Equipment as on 1st Jan 2016 10,000
Less: – Amount of Depreciation charged on the year 2015-16  
10,000 *20%* 3/12 500
Amount of Depreciation charged on the year 2016-17  
9,500 *20%* 12/12 1,900
Amount of Depreciation charged on the year 2017-18  
7,600 *20%* 12/12 1,520
Amount of Depreciation charged on the year 2018-19  
6,080 *20%* 12/12 1,216
Loss on the sale of the asset 4,864

 

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)

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