Question No 36 Chapter No 13

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/cCr.
DateParticulars
J.F.AmountDateParticulars
J.F.Amount
01/07/15To Bank A/c 5,00,000    
    31/03/16By Balance C/d 5,00,000
   5,00,000   5,00,000
01/04/16To Balance b/d 5,00,000    
01/10/16To Bank A/c 1,50,00031/03/17By Balance C/d 6,50,000
   6,50,000   6,50,000
01/04/17To Balance b/f 6,50,000    
    31/03/18By Balance C/d 6,50,000
   6,50,000   6,50,000

 

Dr.Provision for Depreciation A/cCr.
DateParticulars
J.F.AmountDateParticulars
J.F.Amount
    01/03/16By Depreciation A/c*1 37,500
01/03/16To Balance c/d 37,500    
   37,500   37,500
    01/04/16By Balance b/f 37,500
    01/03/17By Depreciation A/c 57,500
01/03/17To Balance c/d 95,000    
   95,000   95,000
    01/04/17By Balance b/f 95,000
    13/03/18By Depreciation A/c*3 65,000
13/03/18To 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

Thanks, Please Like and share with your friends  

Comment if you have any question.

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)

Leave a Reply

About us

About us, we are here to improve your knowledge in all financial & Business related topics and to get better carrier opportunities. The author has about 10-year Experience in tuition Business. It is very difficult to teach a large number of students with a personal touch or in a classroom. 

Animation's Resource websites

All Icons and images used on my website were downloaded from the following website please go and download free:-

close