Question No 36 Chapter No 13
Creation of Provision for Depreciation Account
36. Chancal Patel purchased surgical instruments for her hospital for Rs 5,00,000 on 1st July 2015. depreciation was charged @10% p.a. on straight line basis and is transferred to Accumulated Depreciation Account. She purchased another surgical instrument for Rs 1,50,000 on 1st October 2016
Prepare surgical Equipment and Provision for Depreciation Accout for the years 2015-16 to 2017-18
The solution of Question No 36 Chapter No 13:-
| Dr. | Surgical Equipment A/c | Cr. | |||||
| Date | Particulars |
J.F. | Amount | Date | Particulars |
J.F. | Amount |
| 01/07/15 | To Bank A/c | 5,00,000 | |||||
| 31/03/16 | By Balance C/d | 5,00,000 | |||||
| 5,00,000 | 5,00,000 | ||||||
| 01/04/16 | To Balance b/d | 5,00,000 | |||||
| 01/10/16 | To Bank A/c | 1,50,000 | 31/03/17 | By Balance C/d | 6,50,000 | ||
| 6,50,000 | 6,50,000 | ||||||
| 01/04/17 | To Balance b/f | 6,50,000 | |||||
| 31/03/18 | By Balance C/d | 6,50,000 | |||||
| 6,50,000 | 6,50,000 | ||||||
| Dr. | Provision for Depreciation A/c | Cr. | |||||
| Date | Particulars |
J.F. | Amount | Date | Particulars |
J.F. | Amount |
| 01/03/16 | By Depreciation A/c*1 | 37,500 | |||||
| 01/03/16 | To Balance c/d | 37,500 | |||||
| 37,500 | 37,500 | ||||||
| 01/04/16 | By Balance b/f | 37,500 | |||||
| 01/03/17 | By Depreciation A/c | 57,500 | |||||
| 01/03/17 | To Balance c/d | 95,000 | |||||
| 95,000 | 95,000 | ||||||
| 01/04/17 | By Balance b/f | 95,000 | |||||
| 13/03/18 | By Depreciation A/c*3 | 65,000 | |||||
| 13/03/18 | To Balance c/d | 1,60,000 |
|||||
| 1,60,000 |
1,60,000 |
||||||
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 = 5,00,000
Rate of Depreciation = 10%
Period = from 01/07/2015 to 31/03/2016 i.e.9 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 5,00,000 X 10/100 X 9/ 12
Depreciation = 37,500
Total Depreciation for the year = 37,500
*2:- Calculation of the amount of Depreciation on furniture for the year 2016-17
Machinery purchased on 1st Jul 2015
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 12/ 12
Depreciation = 50,000
Machinery purchased on 1st Oct 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,50,000
Rate of Depreciation = 10%
Period = from 01/10/2016 to 31/03/2017 i.e.6 months
(from the date of purchase/Beginning balance to end of the financial year)
= 1,50,000 X 10/100 X 6/ 12
Depreciation = 7,500
Total Depreciation for the year = 57,500
*3:- Calculation of the amount of Depreciation on furniture for the year 2017-18
Machinery purchased on 1st Jul 2015
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 5,00,000
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 end of the financial year)
= 5,00,000 X 10/100 X 12/ 12
Depreciation = 50,000
Machinery purchased on 1st Oct 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,50,000
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 end of the financial year)
= 1,50,000 X 10/100 X 12/ 12
Depreciation = 15,000
Total Depreciation for the year = 65,000
Depreciation | Meaning | Methods | Examples
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Also, Check out the solved question of all Chapters: –
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
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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)