# Question No 4 Chapter No 14 – T.S. Grewal 11 Class

Question No.4 - Chapter No.14- T.S. Grewal +1 Book 2019-Solution

Question No 4 Chapter No 14

4. On 1st April 2014 A Ltd, purchased a machine for the Rs 2,40,000 and spent Rs 10,000 on its erection. On 1st October 2014, a piece of addition machinery costing Rs 1,00,000 was purchased, On October 2016 the machinery purchased on 1st April, 0214 was sold for Rs 1,43,000 and on the same date, a new machine was purchased at a cost of Rs 2,00,000.
Show the Machinery Account for the first four financial years after charging Depreciation at 5% p.a. by the Straight Line Method.

The solution of Question No 4 Chapter No 14: –

 Dr. Machine A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 01/04/14 To Cash A/c 2,50,000 31/03/15 By Deprecation A/c *1 15,000 01/10/14 To Cash A/c 1,00,000 31/03/15 By Balance C/d 3,35,000 3,50,000 3,50,000 01/03/15 To Balance b/f 3,35,000 31/03/16 By Deprecation A/c 17,500 31/03/16 By Balance C/d 3,17,500 3,35,000 3,35,000 01/03/16 To Balance b/d 3,17,500 01/10/16 By Cash A/c 1,43,000 01/10/16 To Cash A/c 2,00,000 01/10/16 By Deprecation A/c 6,250 01/10/16 By Loss on sale of machine A/c 75,750 31/03/17 By Deprecation A/c*3 10,000 31/03/17 By Balance C/d 2,82,500 5,17,500 5,17,500 01/04/17 To Balance b/f 2,82,500 31/03/18 By Deprecation A/c 17,500 31/03/18 By Balance C/d 2,67,500 5,17,500 5,17,500

Working note:-

*1:- Calculation of the amount of Depreciation on machinery for F/Y 2014-15
Purchased on 1st April 2014
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,50,000
Rate of Depreciation = 5%
Period = from 01/04/14 to 31/03/15 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
=2,50,000 X 5/100 X 12/12
Depreciation =12,500
Purchased 1st October 2014
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,00,000
Rate of Depreciation = 5%
Period = from 01/10/14 to 31/03/15 i.e. 6 months
(from the date of purchase/Beginning balance to end of the financial year)
= 1,00,000 X 5/100 X 6/12
Depreciation =2,500
Total Depreciation for the finical year 2014-15 =15,000

 Statement Showing profit or loss on the sale of Machinery Cr. Particulars Amount Book value of machinery as on 1st April 2014 when it was purchased 2,50,000 Less: – Amount of Depreciation charged on the year 2014-15 2,50,000 * 5% *12/12 12,500 Amount of Depreciation charged on year 2015-16 2,50,000 * 5% *12/12 12,500 Amount of Depreciation charged on year 2015-16 2,50,000 * 5% *6/12 6,250 Sale Price of Machinery 1,43,000 Loss on the sale of the asset 75,750

*2:- Calculation of the amount of Depreciation on machinery for F/Y 2016-17
Purchased on 1st October 2016
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 1,00,000
Rate of Depreciation = 5%
Period = from 01/04/16 to 31/03/17 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 1,00,000 X 5/100 X 12/12
Depreciation =5,000
Purchased 1st October 2014
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 2,00,000
Rate of Depreciation = 5%
Period = from 01/10/16 to 31/03/17 i.e. 6 months
(from the date of purchase/Beginning balance to end of the financial year)
= 2,00,000 X 5/100 X 6/12
Depreciation =5,000
Total Depreciation for the finical year 2014-15 =10,000

Depreciation | Meaning | Methods | Examples

Comment if you have any question.

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

T.S. Grewal’s Double Entry Book Keeping