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Question No 35 Chapter No 14 – T.S. Grewal 11 Class

Question No 35 Chapter No 14
Question No.35 - Chapter No.14- T.S. Grewal +1 Book 2019-Solution

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Question No 35 Chapter No 14

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35. On 1st April 2015, Amit Kumar purchased five machines for ₹ 60,000 each. Depreciation @ 10% p.a. on initial cost has been changed from the Profit and Loss Account and credited to Provision for Depreciation Account.
On 1st April 2016, one machine was sold for ₹ 50,000 and on 1st April 2017, another machine was sold for ₹ 50,000. An improved model costing ₹ 1,00,000 was purchased on 1st October 2016. IGST was paid @ 12%. Amit Kumar closes his books on 31st March each year. You are required to show: (i) Machinery Account: (ii) Machinery Disposal Account and (iii) Provision for Depreciation Account for the period of three accounting years ended 31st March 2018.
The solution of Question No 35 Chapter No 14: –

Dr.Machinery A/cCr.
DateParticulars
J.F.AmountDateParticulars
J.F.Amount
01/04/15To Bank A/c 3,00,000    
    31/03/16By Balance C/d 3,00,000
   3,00,000   3,00,000
01/04/16To Balance b/d 3,00,00001/04/16By Machinery Disposal A/c 60,000
01/10/16To Bank A/c 1,00,00031/03/17By Balance C/d 3,40,000
   4,00,000   4,00,000
01/04/17To Balance b/d 3,40,00031/03/18By Machinery Disposal A/c 60,000
    31/03/18By Balance C/d 2,80,000
   3,40,000   3,40,000

 

Dr.Accumulated Depreciation Account A/cCr.
DateParticulars
J.F.AmountDateParticulars
J.F.Amount
    31/03/15By Deprecation A/c*1 30,000
31/03/16To Balance c/d  30,000    
   30,000   30,000
30/09/13To Machinery disposal A/c 6,00031/03/16To Balance b/d 30,000
01/04/17To Balance c/d  53,00031/03/16By Deprecation A/c*2 29,000
   59,000   59,000
30/09/13To Machinery disposal A/c 12,00001/12/17To Balance b/d 53,000
31/03/18To Balance c/d  69,00031/03/18By Deprecation A/c*3 28,000
   81,000   81,000

 

Dr.Machinery Disposal AccountCr.
DateParticulars
J.F.AmountDateParticulars
J.F.Amount
30/09/17To Machinery A/c 60,00030/09/17By Provision for Depreciation A/c 6,000
    30/09/17By Bank A/c 50,000
    30/09/17By Loss on sale of Machinery A/c 4,000
   60,000   60,000

 

Dr.Machinery Disposal AccountCr.
DateParticulars
J.F.AmountDateParticulars
J.F.Amount
30/09/17To Machinery A/c 60,00001/04/17By Provision for Depreciation A/c 12,000
    01/04/17By Bank A/c 50,000
01/04/17To Profit on sale of Machinery A/c 2,000    
   62,000   62,000

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Working Note:-

*1:- Calculation of the amount of Depreciation on furniture for the year 2015-16
Purchased on 1st October 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 6,00,000
Rate of Depreciation = 10%
Period = from 01/010/2015 to 31/03/2016 i.e.6months
(from the date of purchase/Beginning balance to the end of the financial year)
=6,00,000 X10/100 X 12/12
Depreciation = 30,000
Total Depreciation for the year = 30,000

*2:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Purchased on 1st October 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,40,000
Rate of Depreciation = 10%
Period = from 01/04/2016 to 31/03/2017 i.e.12months
(from the date of purchase/Beginning balance to the end of the financial year)
=2,40,000 X10/100 X 12/12
Depreciation = 24,000
Purchased on 1st October 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset =1,00,000
Rate of Depreciation = 10%
Period = from 01/10/2016 to 31/03/2017 i.e.6months
(from the date of purchase/Beginning balance to end of the financial year)
=1,00,000 X10/100 X 6/12
Depreciation = 5,000
Total Depreciation for the year = 29,000

Statement Showing profit or loss on the sale of Machinery 
Particulars
Amount
Purchase value of machinery as on 1st October, 201560,000
Less: – Amount of Depreciation charged on the year 2015-16 
60,000*10%*12/126,000
Book value of an asset as on 1st September 201654,000
Sale Price of Machinery 50,000
Loss on the sale of the asset4,000



*3:– Calculation of the amount of Depreciation on furniture for the year 2016-17
 Purchased on 1st October,2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,80,000
Rate of Depreciation = 10%
Period = from 01/04/2016 to 31/03/2017 i.e.12months
(from the date of purchase/Beginning balance to end of the financial year)
=1,80,000 X10/100 X 12/12
Depreciation = 18,000
Purchased on 1st October,2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset =1,00,000
Rate of Depreciation = 10%
Period = from 01/03/2017 to 31/03/2018 i.e.12months
(from the date of purchase/Beginning balance to end of the financial year)
=1,00,000 X10/100 X 6/12
Depreciation = 10,000
Total Depreciation for the year = 28,000

 

Statement Showing profit or loss on the sale of Machinery 
Particulars
Amount
Purchase value of machinery as on 1st October, 201560,000
Less: – Amount of Depreciation charged on the year 2015-16 
60,000*10%*12/126,000
Amount of Depreciation charged on the year 2016-176,000
Book value of an asset as on 1st September 201648,000
Sale Price of Machinery 50,000
Profit on the sale of the asset2,000

 

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

Check out T.S. Grewal +1 Book 2019 @ Official Website of Sultan Chand Publication

T.S. Grewal's Double Entry Book Keeping

T.S. Grewal’s Double Entry Book Keeping

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