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

Question No 4 Chapter No 14

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

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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

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T.S. Grewals Double Entry Book Keeping - Question No 4 Chapter No 14 - T.S. Grewal 11 Class

T.S. Grewal’s Double Entry Book Keeping

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