Question No 9 Chapter No 14 – T.S. Grewal 11 Class

Question No 9 Chapter No 14

Question No 9 Chapter No 14

9. On 1st July 2015 A Co., Ltd. Purchases second-hand machinery for Rs 20,000 and spends Rs 30,000 on reconditioning and installing it. On 1st January 2016, the firm purchases new machinery worth Rs 12,000. on 30th June 2017, the machinery purchased on 1st January 2016 was sold for Rs 8,000 and on 1st July, a fresh Plant was installed payment for this plant was to be made as follows:
1st July 2017 Rs 5,000
30th Jun 2018 Rs 6,000
03rd June 2019 Rs 5,500
Payment in 2018 and 2019 include the interest of Rs 1,000 and RS 500 respectively.
The Company writes off 10 p.a. on the original cost. The account closed every year on 31st March. Show the Machinery account for the year ended 31st March 2018.

The solution of Question No 9 Chapter No 14: –

Dr. Machine A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
01/7/15 To Cash A/c   23,000 31/03/15 By Deprecation A/c *1   2,075
01/1/16 To Cash A/c   12,000 31/03/15 By Balance C/d   32,975
      35,000       35,000
01/04/16 To Balance b/d   32,975
31/03/17 By Deprecation A/c *2   3,500
        31/03/17 By Balance C/d   29,475
      32,975
      32,975
01/04/17 To Balance b/d    29,475 30/6/17 By Cash A/c   8,000
01/07/17 To Cash A/c   15,000 30/6/17 By Deprecation A/c   300
        30/6/17 By loss on the sale of van A/c   2,200
        30/3/18 By Deprecation A/c*3   3,425
        30/3/18 By Balance C/d   30,550
      51,750
      51,750


Working note:-

*1:- Calculation of the amount of Depreciation on machinery for F/Y 2015-16
Purchased on 1st July 2015

Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 23,000
Rate of Depreciation = 10%
Period = from 01/07/15 to 31/03/16 i.e. 9 months
(from the date of purchase/Beginning balance to the end of the financial year)
=23,000 X 10/100 X 9/12
Depreciation =1,725

Purchased 1st January 2016

Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 12,000
Rate of Depreciation = 10%
Period = from 01/1/15 to 31/03/16 i.e. 3 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 12,000 X 10/100 X 3/12
Depreciation = 300
Total Depreciation for the finical year 2014-15 =2,025


*2:- Calculation of the amount of Depreciation on machinery for F/Y 2015-16
Purchased on 1st July 2014
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 23,000
Rate of Depreciation = 10%
Period = from 01/04/15 to 31/03/16 i.e. 12 months
(from the date of purchase/Beginning balance to the end of the financial year)
=23,000 X 10/100 X 12/12
Depreciation = 2,300

Purchased 1st January 2017
Depreciation = Value of Asset X Rate of Depreciation X Period
Value of Asset = 15,000
Rate of Depreciation = 10%
Period = from 01/7/15 to 31/03/16 i.e. 3 months
(from the date of purchase/Beginning balance to the end of the financial year)
= 15,000 X 10/100 X 9/12
Depreciation = 1,125
Total Depreciation for the finical year 2015-16=3,425

 

Statement Showing profit or loss on the sale of Machinery Cr.
Particulars
Amount
Book value of machinery as on 1st June 2015 when it was purchased 12,000
Less: – Amount of Depreciation charged on the year 2015-16  
12,000*10%*3/12 300
 Amount of Depreciation charged on the year 2016-17 1,200
Amount of Depreciation charged on the year 2017-18  
12,000*10%*3/12 300
Sale Price of Machinery 8,000
Loss on the sale of the asset 2,200



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 9 Chapter No 14 - T.S. Grewal 11 Class

T.S. Grewal’s Double Entry Book Keeping

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