Question No 37 Chapter No 12 – D.K Goal 11 Class

Question No 37 Chapter No 12

Question No 37 Chapter No 12

Free Accounting book Solution - Class 11 and Class 12

37. A Limited purchased a machine on 1st July 2017 for 3,00,000 and on 1st January 2019 bought another machinery for 2,00,000. On 1st August 2019 machine bought in 2017 was sold for 1,60,000. Another machine was bought for 1,50,000 on 1st October 2019. It was decided to provide depreciation @ 10% p.a. on written down value method assuming books are closed on 31st March each year. Prepare Machinery Account and Provision for depreciation account for 3 years.

The solution of Question No 37 Chapter No 12: –

Dr. Plant A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
1st Jan.2017 To Bank A/c   3,00,000        
        31st Dec2017 By Balance C/d   3,00,000
      3,00,000       3,00,000
1st Jan.2018 To Balance b/f   3,00,000        
1st Jan.2019 To Bank A/c   2,00,000 31st Dec2018 By Balance C/d   5,00,000
      5,00,000
      5,00,000
1st Jan 2019 To Balance b/f   5,00,000 1st Aug 2019 By Provision for Depreciation A/c   58,575
1st Oct.2019 To Bank A/c   1,50,000 1st Aug 2019 By Bank A/c   1,60,000
        1st Aug 2019 By Profit & loss A/c   81,425
        31st Mar 2019
By Balance C/d
  3,50,000
      6,50,000       6,50,000
Dr. Provision for Depreciation  A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
        31st Mar 2018 By Depreciation A/c    22,500
31stMar.2018 Balance c/d   22,500        
      22,500       22,500
        31st Apr 2018 By Balance b/d   22,500
31st Mar.2018 Balance c/d   55,250 31st Mar 2019 By Depreciation A/c (27,750 + 5,000)   32,750
      55,250       55,250
31stOct.2019 To Machine Disposal A/c   58,575 31st Apr 2019 By Balance b/d   55,250
        1st Oct 2019 By Depreciation A/c (6 Months)   8,325
31stMar.2020 To Balance b/f   32,000
31st Mar.2020 By Depreciation A/c (19,500 +7,5000   27,000
      90,575       90,575

Working Note:
Calculation of Profit or Loss on Sale M1

Statement Showing the Profit and loss on the sale of Plant
Particulars
Amount
Machinery Purchase on of Equipment as on 1st Jan. 2017 3,00,000
Less: Depreciation 58,575
Book value of asset as on 1st Oct, 2019 2,41,425
Sale Price of Machinery 1,60,000
Profit on the sale of the asset 81,425

Depreciation | Meaning | Methods | Examples

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