Question No 7 Chapter No 14 - T.S. Grewal 11 Class

Question No 7 Chapter No 14

7. A Van was purchased on 1st April 2015 for Rs 60,000 and Rs 5,000 spent on its repair and registration. On 1st October 2016, another van was purchased for Rs 70,000. On 1st April 2017, the first van was purchased on 1st April 2015 was sold for Rs 45,000 and new van costing Rs 1,70,000 was purchased on the same date. Show the van Account from 2015-16 to 2017-18 on the basis of straight Line Method, if the rate of Depreciation charged is 10% p.a. Assume that books are closed on 31st March every year.
The Depreciation expense for the year ended 31st March 2012
The netbook value of the asset on 31st March 2016.
The gain or loss on the sale of the asset on 31st March 2012

The solution of Question No 7 Chapter No 14: –

Dr.	Machine A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
01/04/15	To Cash A/c		65,000	31/03/16	By Deprecation A/c		6,500
				31/03/16	By Balance C/d		58,500
			65,000				65,000
01/04/16	To Balance b/d		58,500	31/03/17	By Deprecation A/c		10,000
01/10/16	To Cash A/c		70,000	31/03/17	By Balance C/d		1,18,500
			1,28,500				1,28,500
01/04/17	To Balance b/d		1,18,500	01/04/17	By Cash A/c		45,000
01/04/17	To Cash A/c		1,70,000	01/04/17	By loss on the sale of van A/c		7,000
				31/03/15	By Deprecation A/c		24,000
				31/03/15	By Balance C/d		2,12,500
			2,88,500				2,88,500

Working note:-

Statement Showing profit or loss on the sale of Machinery	Cr.
Particulars	Amount
Book value of van as on 1st April 2015 when it was purchased	65,000
Less: – Amount of Depreciation charged on the year 2015-16
65,00010%12/12	6,500
Amount of Depreciation charged on the year 2016-17	6,500
Sale Price of Machinery	45,000
Loss on the sale of the asset	7,000

Depreciation | Meaning | Methods | Examples

Thanks, Please Like and share with your friends

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