Question No 5 Chapter No 14 - T.S. Grewal 11 Class

Question No 5 Chapter No 14

5. From the following transaction of concern, prepare the Machinery account for the year ended 31st March 2018
1st April 2017: purchased a second – hand machinery for Rs 40,000.
1st April 2017: Spent Rs 10,000 on repair for the making it serviceable.
30th September 2017: purchased additional new machinery for Rs 20,000
31st December 2017: Repair and renewals of machinery Rs 3,000*
31st March 2018: Deprecate the machinery at 10% p.a.

The solution of Question No 5 Chapter No 14: –

Dr.	Machine A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
01/04/17	To Cash A/c		50,000	31/03/18	By Deprecation A/c *1		6,000
30/9/17	To Cash A/c		20,000	31/03/15	By Balance C/d		64,000
			70,000				70,000

*31st December 2017: Repair and renewals of machinery Rs 3,000
* In This the traction shows the amount spent on repairs and renewals of Machinery the Repair and Renewables is of revenue nature and not capital nature and hence not debited to the Machinery account

Working note:-

*1:- Calculation of the amount of Depreciation on machinery for F/Y 2014-15
Purchased on 1st April 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 50,000
Rate of Depreciation = 5%
Period = from 01/04/17 to 31/03/18 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
=50,000 X 10/100 X 12/12
Depreciation =5,000
Purchased 1st October 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 20,000
Rate of Depreciation = 5%
Period = from 30/9/17 to 31/03/18 i.e. 6 months
(from the date of purchase/Beginning balance to end of the financial year)
= 20,000 X 10/100 X 6/12
Depreciation = 1,000
Total Depreciation for the finical year 2014-15 =6,000

Depreciation | Meaning | Methods | Examples

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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