Question No 37 Chapter No 12

Question No 37 Chapter No 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/cCr.
DateParticulars
J.F.AmountDateParticulars
J.F.Amount
1st Jan.2017To Bank A/c 3,00,000    
    31st Dec2017By Balance C/d  3,00,000
   3,00,000   3,00,000
1st Jan.2018To Balance b/f 3,00,000    
1st Jan.2019To Bank A/c 2,00,00031st Dec2018By Balance C/d  5,00,000
   5,00,000
   5,00,000
1st Jan 2019To Balance b/f 5,00,0001st Aug 2019By Provision for Depreciation A/c 58,575
1st Oct.2019To Bank A/c 1,50,0001st Aug 2019By Bank A/c 1,60,000
    1st Aug 2019By 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/cCr.
DateParticulars
J.F.AmountDateParticulars
J.F.Amount
    31st Mar 2018By Depreciation A/c  22,500
31stMar.2018Balance c/d 22,500    
   22,500   22,500
    31st Apr 2018By Balance b/d 22,500
31st Mar.2018Balance c/d 55,25031st Mar 2019By Depreciation A/c (27,750 + 5,000) 32,750
   55,250   55,250
31stOct.2019To Machine Disposal A/c 58,57531st Apr 2019By Balance b/d 55,250
    1st Oct 2019By Depreciation A/c (6 Months) 8,325
31stMar.2020To Balance b/f 32,000
31st Mar.2020By 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. 20173,00,000
Less: Depreciation58,575
Book value of asset as on 1st Oct, 20192,41,425
Sale Price of Machinery 1,60,000
Profit on the sale of the asset81,425

Depreciation | Meaning | Methods | Examples

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D K Goel – New ISC Accountancy -(Class 11 – ICSE)- Solution

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