# Question No 40 Chapter No 13 – USHA Publication 11 Class

Question No 40 Chapter No 13

Creation of Provision for Depreciation Account

40. The following balances appear in the books of Jain Mills:

 April.1 2018 Machinery Account Rs 80,000 Provision for Depreciation Rs 30,000

On April 1, 2018 they decided to sell machinery for Rs 8,350. this machine was purchased for Rs 16,000 on 1st April 2014.
You are required to prepare Machinery Account and provision for depreciation Account for the year 2018-19, assuming the firm has been charging depreciation at 10% p.a. on original cost method

The solution of Question No 40 Chapter No 13:-

 Dr. Machinery A/c Cr. Dat Particulars J.F. Amount Date Particulars J.F. Amount 01/03/18 To Balance b/f 80,000 01/03/18 By Machinery Disposal A/c 16,000 31/03/19 By Balance C/d 64,000 80,000 80,000

 Dr. Provision for Depreciation A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 01/03/18 To Machinery Disposal A/c 6,400 01/03/18 By Balance b/f 30,000 31/03/19 To Balance c/d 30,000 31/03/19 By Depreciation A/c 6,400 36,400 36,400

 Dr. Machinery Disposal A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 01/03/18 By Balance b/f 8,350 01/03/18 By Provision for Dep. A/c 6,400 01/03/18 By Profit/Loss A/c 1,250 31/03/19 To Balance c/d 16,000 16,000 16,000

Working note:-

 Statement Showing profit or loss on the sale of Machinery Particulars Amount Purchase value of Equipment as on 1st Apr, 2014 16,000 Less: – Amount of Depreciation charged on the year 2014-15 16,000 *10%* 12/12 1,600 Amount of Depreciation charged on the year 2015-16 16,000 *10%* 12/12 1,600 Amount of Depreciation charged on the year 2016-17 16,000 *10%* 12/12 1,600 Amount of Depreciation charged on the year 2017-18 16,000 *10%* 12/12 1,600 Book value of the asset as on 1st March 2018 9,600 Sale Price of Machinery 8,350 Loss on the sale of the asset 1,250

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Depreciation | Meaning | Methods | Examples

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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)