Double Entry Book Keeping Ts Grewal 2019 Solutions for Class 11 Commerce Accountancy Chapter 11 Depreciation are provided here with simple step-by-step explanations. These solutions for Depreciation are extremely popular among Class 11 Commerce students for Accountancy Depreciation Solutions come handy for quickly completing your homework and preparing for exams. All questions and answers from the Double Entry Book Keeping Ts Grewal 2019 Book of Class 11 Commerce Accountancy Chapter 11 are provided here for you for free. You will also love the ad-free experience on Meritnation’s Double Entry Book Keeping Ts Grewal 2019 Solutions. All Double Entry Book Keeping Ts Grewal 2019 Solutions for class Class 11 Commerce Accountancy are prepared by experts and are 100% accurate.
Page No 14.48:
Question 1:
Calculate the Amount of annual Depreciation and Rate of Depreciation under Straight Line Method (SLM) from the following:
Purchased a second-hand machine for ₹ 96,000, spent ₹ 24,000 on its cartage, repairs and installation, estimated useful life of machine 4 years. Estimated residual value ₹ 72,000.
Answer:
Page No 14.48:
Question 2:
On 1st April, 2016, X Ltd. purchased a machine costing ₹ 4,00,000 and spent ₹ 50,000 on its installation. The estimated life of the machinery is 10 years, after which its residual value will be ₹ 50,000 only. Find the amount of annual depreciation according to the Fixed Instalment Method and prepare Machinery Account for the first three years. The books are closed on 31st March every year.
Answer:
Book of X Ltd. Machinery Account |
|||||||||
Dr. |
|
Cr. |
|||||||
Date |
Particulars |
J.F. |
Amount (₹) |
Date |
Particulars |
J.F. |
Amount (₹) |
||
2016 |
|
2017 |
|
||||||
April 01 |
Bank |
|
4,00,000 |
Mar.31 |
Depreciation |
|
40,000 |
||
April 01 |
Bank (Erection Expense) |
|
50,000 |
|
Balance c/d |
|
4,10,000 |
||
|
|
|
4,50,000 |
|
|
|
4,50,000 |
||
2017 |
|
|
|
2018 |
|
|
|
||
April 01 |
Balance b/d |
|
4,10,000 |
Mar.31 |
Depreciation |
|
40,000 |
||
|
|
|
|
|
Balance c/d |
|
3,70,000 |
||
|
|
|
4,10,000 |
|
|
|
4,10,000 |
||
2018 |
|
|
|
2019 |
|
|
|
||
April 01 |
Balance b/d |
|
3,70,000 |
Mar.31 |
Depreciation |
|
40,000 |
||
|
|
|
|
|
Balance c/d |
|
3,30,000 |
||
|
|
|
3,70,000 |
|
|
|
3,70,000 |
||
|
|
|
|
|
|
|
|
Calculation of Depreciation:
Page No 14.48:
Question 3:
On 1st April, 2015, furniture costing ₹ 55,000 was purchased. It is estimated that its life is 10 years at the end of which it will be sold for ₹ 5,000. Additions are made on 1st April 2016 and 1st October, 2018 to the value of ₹ 9,500 and ₹ 8,400 (Residual values ₹ 500 and ₹ 400 respectively). Show the Furniture Account for the first four years, if Depreciation is written off according to the Straight Line Method.
Answer:
Furniture Account |
|||||||||||
Dr. |
|
Cr. |
|||||||||
Date |
Particulars |
J.F. |
Amount (₹) |
Date |
Particulars |
J.F. |
Amount (₹) |
||||
2015 |
|
2016 |
|
||||||||
April 01 |
Bank (F1) |
|
55,000 |
March 31 |
Depreciation (F1) |
|
5,000 |
||||
|
|
|
|
March 31 |
Balance c/d (F1) |
|
50,000 |
||||
|
|
|
55,000 |
|
|
|
55,000 |
||||
2016 |
|
|
|
2017 |
|
|
|
||||
April 01 |
Balance b/d (F1) |
|
50,000 |
March 31 |
Depreciation |
|
|
||||
April 01 |
Bank (F2) |
|
9,500 |
|
F1 |
5,000 |
|
|
|||
|
|
|
|
|
F2 |
900 |
|
5,900 |
|||
|
|
|
|
March 31 |
Balance c/d |
|
|
||||
|
|
|
|
|
F1 |
45,000 |
|
|
|||
|
|
|
|
|
F2 |
8,600 |
|
53,600 |
|||
|
|
|
59,500 |
|
|
|
59,500 |
||||
2017 |
|
|
|
2018 |
|
|
|
||||
April 01 |
Balance b/d |
|
|
March 31 |
Depreciation |
|
|
||||
|
F1 |
45,000 |
|
|
|
F1 |
5,000 |
|
|
||
|
F2 |
8,600 |
|
53,600 |
|
F2 |
900 |
|
5,900 |
||
|
|
|
|
March 31 |
Balance c/d |
|
|
||||
|
|
|
|
|
F1 |
40,000 |
|
|
|||
|
|
|
|
|
F2 |
7,700 |
|
47,700 |
|||
|
|
|
53,600 |
|
|
|
53,600 |
||||
2018 |
|
|
|
2019 |
|
|
|
||||
April 01 |
Balance b/d |
|
|
March 31 |
Depreciation |
|
|
||||
|
F1 |
40,000 |
|
|
|
F1 |
5,000 |
|
|
||
|
F2 |
7,700 |
|
47,700 |
|
F2 |
900 |
|
|
||
Oct. 01 |
Bank (F3) |
|
8,400 |
|
F3 |
400 |
|
6,300 |
|||
|
|
|
|
|
|
|
|
||||
|
|
|
|
March 31 |
Balance c/d |
|
|
||||
|
|
|
|
|
F1 |
35,000 |
|
|
|||
|
|
|
|
|
F2 |
6,800 |
|
|
|||
|
|
|
|
|
F3 |
8,000 |
|
49,800 |
|||
|
|
|
56,100 |
|
|
|
56,100 |
||||
|
|
|
|
|
|
|
|
Working Notes:
Page No 14.48:
Question 4:
From the following transactions of a concern, prepare the Machinery Account for the year ended 31st March, 2019:
1st April, 2018 | : | Purchased a second-hand machinery for ₹ 40,000 |
1st April, 2018 | : | Spent ₹ 10,000 on repairs for making it serviceable. |
30th September, 2018 | : | Purchased additional new machinery for ₹ 20,000. |
31st December, 2018 | : | Repairs and renewal of machinery ₹ 3,000. |
31st March, 2019 | : | Depreciate the machinery at 10% p.a. |
Answer:
Machinery Account |
|||||||||||
Dr. |
|
Cr. |
|||||||||
Date |
Particulars |
J.F. |
Amount (₹) |
Date |
Particular |
J.F. |
Amount (₹) |
||||
2018 |
|
2019 |
|
||||||||
Apr.01 |
Bank (M1) |
|
50,000 |
Mar.31 |
Depreciation |
|
|
||||
Sept 30 |
Bank (M2) |
|
20,000 |
|
M1 |
5,000 |
|
|
|||
|
|
|
|
|
M2 (6 months) |
1,000 |
|
6,000 |
|||
|
|
|
|
Mar.31 |
Balance c/d |
|
|
||||
|
|
|
|
|
M1 |
45,000 |
|
|
|||
|
|
|
|
|
M2 (6 months) |
19,000 |
|
64,000 |
|||
|
|
|
70,000 |
|
|
|
70,000 |
||||
|
|
|
|
|
|
|
|
Note:
Repair and renewal made on December 31, 2018 will not be recorded in Machinery Account because, this repair was made after putting the Machinery into use.
Page No 14.48:
Question 5:
An asset was purchased for ₹ 10,500 on 1st April, 2012. The scrap value was estimated to to be ₹ 500 at the end of asset's 10 years' life. Straight Line Method of depreciation was used. The accounting year ends on 31st March every year. The asset was sold for ₹ 600 on 31st March, 2019. Calculate the following.
(i) The Depreciation expense for the year ended 31st March, 2013.
(ii) The net book value of the asset on 31st March, 2017.
(iii) The gain or loss on sale of the asset on 31st March, 2019.
Answer:
Asset Account |
|||||||||
Dr. |
|
Cr. |
|||||||
Date |
Particulars |
J.F. |
Amount (₹) |
Date |
Particulars |
J.F. |
Amount (₹) |
||
2012 |
|
2013 |
|
||||||
April 01 |
Bank |
|
10,500 |
Mar.31 |
Depreciation |
|
1,000 |
||
|
|
|
|
Mar.31 |
Balance c/d |
|
9,500 |
||
|
|
|
10,500 |
|
|
|
10,500 |
||
2013 |
|
|
|
2014 |
|
|
|
||
April 01 |
Balance b/d |
|
9,500 |
Mar.31 |
Depreciation |
|
1,000 |
||
|
|
|
|
Mar.31 |
Balance c/d |
|
8,500 |
||
|
|
|
9,500 |
|
|
|
9,500 |
||
2014 |
|
|
|
2015 |
|
|
|
||
April 01 |
Balance b/d |
|
8,500 |
Mar.31 |
Depreciation |
|
1,000 |
||
|
|
|
|
Mar.31 |
Balance c/d |
|
7,500 |
||
|
|
|
8,500 |
|
|
|
8,500 |
||
2015 |
|
|
|
2016 |
|
|
|
||
April 01 |
Balance b/d |
|
7,500 |
Mar.31 |
Depreciation |
|
1,000 |
||
|
|
|
|
Mar.31 |
Balance c/d |
|
6,500 |
||
|
|
|
7,500 |
|
|
|
7,500 |
||
2016 |
|
|
|
2017 |
|
|
|
||
April 01 |
Balance b/d |
|
6,500 |
Mar.31 |
Depreciation |
|
1,000 |
||
|
|
|
|
Mar.31 |
Balance c/d |
|
5,500 |
||
|
|
|
6,500 |
|
|
|
6,500 |
||
2017 |
|
|
|
2018 |
|
|
|
||
April 01 |
Balance b/d |
|
5,500 |
Mar.31 |
Depreciation |
|
1,000 |
||
|
|
|
|
Mar.31 |
Balance c/d |
|
4,500 |
||
|
|
|
5,500 |
|
|
|
5,500 |
||
2018 |
|
|
|
2019 |
|
|
|
||
April 01 |
Balance b/d |
|
4,500 |
Mar.31 |
Depreciation |
|
1,000 |
||
|
|
|
|
Mar.31 |
Bank |
|
600 |
||
|
|
|
|
Mar.31 |
Profit and Loss (Loss) |
|
2,900 |
||
|
|
|
4,500 |
|
|
|
4,500 |
||
|
|
|
|
|
|
|
|
(i) Depreciation Expense for the year ended March 31, 2013 is Rs 1000
(ii) The Net Book Value of the asset on March 31, 2017 is Rs 5,500
(iii) Loss on Sale of the asset on March 31, 2019 is Rs 2,900
Page No 14.49:
Question 6:
On 1st April, 2015, A Ltd. purchased a machine for ₹ 2,40,000 and spent ₹ 10,000 on its erection. On 1st October, 2015 an additional machinery costing ₹ 1,00,000 was purchased. On 1st October, 2017, the machine purchased on 1st April, 2015 was sold for ₹ 1,43,000 and on the same date, a new machine was purchased at cost of ₹ 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.
Answer:
Machinery Account
Dr. |
|
Cr. |
||||||||||
Date |
Particulars |
J.F. |
Amount (₹) |
Date |
Particulars |
J.F. |
Amount (₹) |
|||||
2015 |
|
2016 |
|
|||||||||
April 01 |
Bank (M1) |
|
2,50,000 |
March 31 |
Depreciation |
|
|
|||||
Oct. 01 |
Bank (M2) |
|
1,00,000 |
|
M1 |
12,500 |
|
|
||||
|
|
|
|
|
M2 (6 Months) |
2,500 |
|
15,000 |
||||
|
|
|
|
March 31 |
Balance c/d |
|
|
|||||
|
|
|
|
|
M1 |
2,37,500 |
|
|
||||
|
|
|
|
|
M2 |
97,500 |
|
3,35,000 |
||||
|
|
|
3,50,000 |
|
|
|
3,50,000 |
|||||
2016 |
|
|
|
2017 |
|
|
|
|||||
April 01 |
Balance b/d |
|
|
March 31 |
Depreciation |
|
|
|||||
|
M1 |
2,37,500 |
|
|
|
M1 |
12,500 |
|
|
|||
|
M2 |
97,500 |
|
3,35,000 |
|
M2 |
5,000 |
|
17,500 |
|||
|
|
|
|
|
|
|
|
|||||
|
|
|
|
March 31 |
Balance c/d |
|
|
|||||
|
|
|
|
|
M1 |
2,25,000 |
|
|
||||
|
|
|
|
|
M2 |
92,500 |
|
3,17,500 |
||||
|
|
|
3,35,000 |
|
|
|
3,35,000 |
|||||
2017 |
|
|
|
2018 |
|
|
|
|||||
April 01 |
Balance b/d |
|
|
Oct. 01 |
Depreciation (for 6 months) |
|
6,250 |
|||||
|
M1 |
2,25,000 |
|
|
Oct. 01 |
Bank (M1 sold) |
|
1,43,000 |
||||
|
M2 |
92,500 |
|
3,17,500 |
Oct. 01 |
Profit and Loss (loss on sale) |
|
75,750 |
||||
2017 | ||||||||||||
July 01 |
Bank (M3) |
|
2,00,000 |
March 31 |
Depreciation |
|
|
|||||
|
|
|
|
|
M2 |
5,000 |
|
|
||||
|
|
|
|
|
M3 (for 6 months) |
5,000 |
|
10,000 |
||||
|
|
|
|
March 31 |
Balance c/d |
|
|
|||||
|
|
|
|
|
M2 |
87,500 |
|
|
||||
|
|
|
|
|
M3 |
1,95,000 |
|
2,82,500 |
||||
|
|
|
5,17,500 |
|
|
|
5,17,500 |
|||||
2018 |
|
|
|
2019 |
|
|
|
|||||
April 01 |
Balance b/d |
|
|
March 31 |
Depreciation |
|
|
|||||
|
M2 |
87,500 |
|
|
|
M2 |
5,000 |
|
|
|||
|
M3 |
1,95,000 |
|
2,82,500 |
|
M3 |
10,000 |
|
15,000 |
|||
|
|
|
|
March 31 |
Balance c/d |
|
|
|||||
|
|
|
|
|
M2 |
82,500 |
|
|
||||
|
|
|
|
|
M3 |
1,85,000 |
|
2,67,500 |
||||
|
|
|
2,82,500 |
|
|
|
2,82,500 |
|||||
|
|
|
|
|
|
|
|
Working Notes:
1. Calculation of Deprecation
2. Calculation of profit or loss on sale of Machine 1
Particulars |
Amount (₹) |
Book Value on April 01, 2017 |
2,25,000 |
Less: Deprecation for six month |
(6,250) |
Book Value on Oct. 01, 2017 |
2,18,750 |
Less: Sale Proceeds |
(1,43,000) |
Loss on Sale of Machine |
75,750 |
Page No 14.49:
Question 7:
A Van was purchased on 1st April, 2016 for ₹ 60,000 and ₹ 5,000 was spent on its repair and registration. On 1st October, 2017 another van was purchased for ₹ 70,000. On 1st April, 2018, the first van purchased on 1st April, 2016 was sold for ₹ 45,000 and a new van costing ₹ 1,70,000 was purchased on the same date. Show the Van Account from 2016-17 to 2018-19 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.
Answer:
Van Account |
||||||||||||
Dr. |
|
Cr. |
||||||||||
Date |
Particulars |
J.F. |
Amount (₹) |
Date |
Particulars |
J.F. |
Amount (₹) |
|||||
2016 |
|
2017 |
|
|||||||||
April 01 |
Bank (I) |
|
65,000 |
March 31 |
Depreciation (I) |
|
6,500 |
|||||
|
|
|
|
March 31 |
Balance c/d (I) |
|
58,500 |
|||||
|
|
|
65,000 |
|
|
|
65,000 |
|||||
2017 |
|
|
|
2018 |
|
|
|
|||||
April 01 |
Balance b/d (I) |
|
58,500 |
March 31 |
Depreciation |
|
|
|||||
Oct. 01 |
Bank (II) |
|
70,000 |
|
(I) |
6,500 |
|
|
||||
|
|
|
|
|
(II) (for 6 month) |
3,500 |
|
10,000 |
||||
|
|
|
|
March 31 |
Balance c/d |
|
|
|||||
|
|
|
|
|
(I) |
52,000 |
|
|
||||
|
|
|
|
|
(II) |
66,500 |
|
1,18,500 |
||||
|
|
|
1,28,500 |
|
|
|
1,28,500 |
|||||
2018 |
|
|
|
2019 |
|
|
|
|||||
April 01 |
Balance b/d |
|
|
April 01 |
Bank (I) |
|
45,000 |
|||||
|
(I) |
52,000 |
|
|
April 01 |
Profit and Loss (Loss on Sale) |
|
7,000 |
||||
2018 | ||||||||||||
|
(II) |
66,500 |
|
1,18,500 |
March 31 |
Depreciation |
|
|
||||
April 01 |
Bank (III) |
|
1,70,000 |
|
(II) |
7,000 |
|
|
||||
|
|
|
|
|
(III) |
17,000 |
|
24,000 |
||||
|
|
|
|
March 31 |
Balance c/d |
|
|
|||||
|
|
|
|
|
(II) |
59,500 |
|
|
||||
|
|
|
|
|
(III) |
1,53,000 |
|
2,12,500 |
||||
|
|
|
2,88,500 |
|
|
|
2,88,500 |
|||||
|
|
|
|
|
|
|
|
Working Notes
1. Calculation of Annual Depreciation
2. Calculation of profit or loss on sale of Van (I)
Particulars |
Amount (₹) |
Book Value on Apr. 01, 2018 |
52,000 |
Less: Sale of Van |
(45,000) |
Loss on Sale of Van |
7,000 |
Page No 14.49:
Question 8:
On 1st April, 2015, Star Ltd. purchased 5 machines for ₹ 60,000 each. On 1st April, 2017, one of the machine was sold at a loss of ₹ 8,000. On 1st July, 2018, second machine was sold at a loss of ₹ 12,500. A new machine was purchased for ₹ 1,00,000 on 1st October, 2018.
Prepare Machinery Account for 4 years, assuming accounts are closed on 31st March each year and depreciation is charged @ 10% per annum as per Straight Line Method.
Answer:
Dr. |
Machinery A/c |
Cr. |
|||||
Date |
Particulars |
Amount (₹) |
Date |
Particulars |
Amount (₹) |
||
2015 |
|
2016 |
|
||||
April 01 | To Cash/Bank A/c (60,000 × 5) |
3,00,000 |
March 31 | By Depreciation A/c (3,00,000 × 10/100) |
30,000 |
||
|
March 31 | By balance c/d |
2,70,000 |
||||
|
|
|
|||||
3,00,000 |
3,00,000 |
||||||
2016 |
|
2017 |
|
||||
April 01 | To balance b/d |
2,70,000 |
March 31 | By Depreciation A/c (3,00,000 × 10/100) |
30,000 |
||
|
March 31 | By balance c/d |
2,40,000 |
||||
|
|
||||||
2,70,000 |
2,70,000 |
||||||
2017 |
|
2017 |
|
||||
April 01 | To balance b/d |
2,40,000 |
April 01 | By Bank A/c (WN1) |
40,000 |
||
|
April 01 | By Profit & Loss A/c (Loss on sale) |
8,000 |
||||
|
2018 |
|
|||||
|
March 31 | By Depreciation A/c (2,40,000 × 10/100) |
24,000 |
||||
|
(On remaining machinery) |
|
|||||
|
March 31 | By balance c/d |
1,68,000 |
||||
|
|
||||||
2,40,000 |
2,40,000 |
||||||
2018 |
|
2018 |
|
||||
April 01 | To balance c/d |
1,68,000 |
July 1 | By Depreciation A/c (6,000 × 3/12) |
1,500 |
||
Oct.01 | To Cash/Bank A/c |
1,00,000 |
July 1 | By Bank A/c (WN2) |
28,000 |
||
|
July 1 | By Profit & Loss A/c (Loss on Sale) |
12,500 |
||||
|
2019 |
|
|||||
|
March 31 | By Depreciation A/c (On remaining |
23,000 |
||||
|
Machinery) |
|
|||||
|
[(1,80,000 × 10/100) + |
|
|||||
|
(1,00,000 × 10/100 × 6/12)] |
|
|||||
|
March 31 | By balance c/d |
2,03,000 |
||||
|
|
||||||
2,68,000 |
2,68,000 |
||||||
|
|
Working Notes:
1) Calculation of Sale proceeds from Machinery sold on 1st April, 2017 | ||
Book Value of the Machine as on 1st April, 2017 | = | (Total opening balance of Machinery on this date/5) |
= | ₹ (2,40,000/5) = ₹ 48,000 | |
Loss on Sale of Machinery | = | ₹ 8,000 |
Sale proceeds from the Machinery | = | Book Value of the Machine as on 1st April, 2017 – Loss on Sale |
= | ₹ (48,000 – 8,000) = ₹ 40,000 | |
2) Calculation of Sale proceeds from Machinery sold on 1st July 2018 | ||
Book Value of the Machine as on 1st July, 2018 | = | [(Total opening balance of Machinery on this date/4) – Depreciation] |
= | ₹ [(1,68,000/4) – 1,500] = ₹ 40,500 | |
Loss on Sale of Machinery | = | ₹ 12,500 |
Sale proceeds from the Machinery | = | Book Value of the Machine as on 1st July, 2018 – Loss on Sale |
= | ₹ (40,500 – 12,500) = ₹ 28,000 |
Page No 14.49:
Question 9:
A company whose accounting year is a financial year, purchased on 1st July, 2015 machinery costing ₹ 30,000.
It purchased further machinery on 1st January, 2016 costing ₹ 20,000 and on 1st October, 2016 costing ₹ 10,000.
On 1st April, 2017, one-third of the machinery installed on 1st July, 2015 became obsolete and was sold for ₹ 3,000.
Show how Machinery Account would appear in the books of the company. It being given that machinery was depreciated by Fixed Instalment Method at 10% p.a. What would be the value of Machinery Account on 1st April, 2018?
Answer:
Machinery Account |
|||||||||||||||
Dr. |
|
Cr. |
|||||||||||||
Date |
Particulars |
J.F. |
Amount (₹) |
Date |
Particulars |
J.F. |
Amount (₹) |
||||||||
2015 |
|
2016 |
|
||||||||||||
July 01 |
Bank (I) |
|
30,000 |
March 31 |
Depreciation |
|
|
||||||||
2015 | |||||||||||||||
Jan. 01 |
Bank (II) |
|
20,000 |
|
I (for 9 months) |
2,250 |
|
|
|||||||
|
|
|
|
|
II |
500 |
|
2,750 |
|||||||
|
|
|
|
March 31 |
Balanced c/d |
|
|
||||||||
|
|
|
|
|
I |
27,750 |
|
|
|||||||
|
|
|
|
|
II |
19,500 |
|
47,250 |
|||||||
|
|
|
50,000 |
|
|
|
50,000 |
||||||||
2016 |
|
|
|
2017 |
|
|
|
||||||||
April 01 |
Balance b/d |
|
|
March 31 |
Depreciation |
|
|
||||||||
|
I |
27,750 |
|
|
|
I |
3,000 |
|
|
||||||
|
II |
19,500 |
|
47,250 |
|
II |
2,000 |
|
|
||||||
|
|
|
|
|
III |
500 |
|
5,500 |
|||||||
Oct. 01 |
Bank (III) |
|
10,000 |
March 31 |
Balance c/d |
|
|
||||||||
|
|
|
|
|
I |
24,750 |
|
|
|||||||
|
|
|
|
|
II |
17,500 |
|
|
|||||||
|
|
|
|
|
III |
9,500 |
|
51,750 |
|||||||
|
|
|
57,250 |
|
|
|
57,250 |
||||||||
2017 |
|
|
|
2017 |
|
|
|
||||||||
April 01 |
Balance b/d |
|
|
April 01 |
Bank I(1/3rd portion) |
|
3,000 |
||||||||
|
I |
24,750 |
|
|
April 01 |
Profit and Loss (Loss on Sale of I) |
|
5,250 |
|||||||
2018 | |||||||||||||||
|
II |
17,500 |
|
|
March 31 |
Depreciation |
|
|
|||||||
|
III |
9,500 |
|
51,750 |
|
I (on 2/3rd portion) |
2,000 |
|
|
||||||
|
|
|
|
|
II |
2,000 |
|
|
|||||||
|
|
|
|
|
III |
1,000 |
|
5,000 |
|||||||
|
|
|
|
March 31 |
Balance c/d |
|
|
||||||||
|
|
|
|
|
I (on 2/3rd portion) |
14,500 |
|
|
|||||||
|
|
|
|
|
II |
15,500 |
|
|
|||||||
|
|
|
|
|
III |
8,500 |
|
38,500 |
|||||||
|
|
|
51,750 |
|
|
|
51,750 |
||||||||
|
|
|
|
|
|
|
|
Working Notes
1. Calculation of Depreciation
Calculation of profit or loss on sale of 1/3rd Portion of Machine I
Particulars |
Amount (₹) |
Book Value of 1/3rd portion of Machine I on April 01, 2017 (24,750 × 1/3) |
8,250 |
Less: Sale Value |
(3,000) |
Loss on sale |
5,250 |
Page No 14.50:
Question 10:
On 1st July, 2015, A Co. Ltd. purchases second-hand machinery for ₹ 20,000 and spends ₹ 3,000 on reconditioning and installing it. On 1st January, 2016, the firm purchases new machinery worth ₹ 12,000. On 30th June, 2017, the machinery purchased on 1st January, 2016, was sold for ₹ 8,000 and on 1st July, 2017, a fresh plant was installed.
Payments for this plant was to be made as follows:
1st July, 2017 | ₹ 5,000 |
30th June, 2018 | ₹ 6,000 |
30th June, 2019 | ₹ 5,500 |
Payments in 2018 and 2019 include interest of ₹ 1,000 and ₹ 500 respectively.
The company writes off 10% p.a. on the original cost. The accounts are closed every year on 31st March. Show the Machinery Account for the year ended 31st March, 2018.
Answer:
Machinery |
|||||||||||||
Dr. |
|
Cr. |
|||||||||||
Date |
Particulars |
J.F. |
Amount (₹) |
Date |
Particulars |
J.F. |
Amount (₹) |
||||||
2015 |
|
2016 |
|
||||||||||
July 01 |
Bank (I) (20,000 + 3,000) |
|
23,000 |
Mar.31 |
Depreciation |
|
|
||||||
2016 |
|
|
|
|
I (for 9 months) |
1,725 |
|
|
|||||
Jan.01 |
Bank (II) |
|
12,000 |
|
II (for 3 months) |
300 |
|
2,025 |
|||||
|
|
|
|
Mar.31 |
Balance c/d |
|
|
||||||
|
|
|
|
|
I |
21,275 |
|
|
|||||
|
|
|
|
|
II |
11,700 |
|
32,975 |
|||||
|
|
|
35,000 |
|
|
|
35,000 |
||||||
2016 |
|
|
|
2017 |
|
|
|
||||||
April 01 |
Balance b/d |
|
|
Mar.31 |
Depreciation |
|
|
||||||
|
I |
21,275 |
|
|
|
I |
2,300 |
|
|
||||
|
II |
11,700 |
|
32,975 |
|
II |
1,200 |
|
3,500 |
||||
|
|
|
|
Mar.31 |
Balance c/d |
|
|
||||||
|
|
|
|
|
I |
18,975 |
|
|
|||||
|
|
|
|
|
II |
10,500 |
|
29,475 |
|||||
|
|
|
32,975 |
|
|
|
32,975 |
||||||
2017 |
|
|
|
2017 |
|
|
|
||||||
April 01 |
Balance b/d |
|
|
June 30 |
Bank (II) |
|
8,000 |
||||||
|
I |
18,975 |
|
|
June 30 |
Depreciation (II) (for 3 months) |
|
300 |
|||||
|
II |
10,500 |
|
29,475 |
June 30 |
Profit and Loss (Loss) |
|
2,200 |
|||||
July 01 |
Bank (III) |
|
5,000 |
2018 |
|
|
|
||||||
July 01 |
Creditors for plant (III) |
|
10,000 |
Mar.31 |
Depreciation |
|
|
||||||
|
|
|
|
|
I |
2,300 |
|
|
|||||
|
|
|
|
|
III (on 15,000 for 8 months) |
1,125 |
|
3,425 |
|||||
|
|
|
|
|
Balance c/d |
|
|
||||||
|
|
|
|
|
I |
16,675 |
|
|
|||||
|
|
|
|
|
III |
13,875 |
|
30,550 |
|||||
|
|
|
44,475 |
|
|
|
44,475 |
||||||
|
|
|
|
|
|
|
|
Working Notes
1. Calculation of Depreciation
2. Calculation of profit on loss on sale of Machine (II)
Particulars |
Amount (Rs) |
Book Value of Machine (II) on April 01, 2017 |
10,500 |
Less: Depreciation for 3 Months |
(300) |
Book Value on June 30 |
10,200 |
Less: Sale |
(8,000) |
Loss on Sale |
2,200 |
Page No 14.50:
Question 11:
On 1st April, 2016, Shivam Enterprise purchased a second-hand machinery for ₹ 52,000 and spent ₹ 2,000 on cartage, ₹ 3,000 on unloading, ₹ 2,000 on installation and ₹ 1,000 as brokerage of the middle man. It was estimated that the machinery will have a scrap value of ₹ 6,000 at the end of its useful life, which is 10 years. On 31st December 2016, repairs and renewals amounted to ₹ 2,500 were paid. On 1st October, 2018, this machine was sold for ₹ 30,600 and an amount of ₹ 600 was paid as commission to an agent. Calculate the amount of annual depreciation and rate of depreciation. Also prepare the Machinery Account for first 3 years, assuming that firm follows financial year for accounting.
Answer:
Machinery Account |
||||||
Dr. |
Cr. |
|||||
Date |
Particulars |
Amount (₹) |
Date |
Particulars |
Amount (₹) |
|
2016 |
|
|
2017 |
|
|
|
Apr. 01 |
Bank A/c |
60,000 |
Mar. 31 |
Depreciation A/c |
5,400 |
|
|
|
|
Mar. 31 |
Balance c/d |
54,600 |
|
|
|
60,000 |
|
|
60,000 |
|
2017 |
|
|
2018 |
|
|
|
Apr. 01 |
Balance b/d |
54,600 |
Mar. 31 |
Depreciation A/c |
5,400 |
|
|
|
|
Mar. 31 |
Balance c/d |
49,200 |
|
|
|
|
|
|
|
|
|
|
54,600 |
|
|
54,600 |
|
2018 |
|
|
2019 |
|
|
|
Apr. 01 |
Balance b/d |
49,200 |
Oct. 01 |
Depreciation A/c (for 6 months) |
2,700 |
|
|
|
|
|
Bank A/c (Sale) |
30,000 |
|
|
|
|
|
Profit and Loss A/c (Loss on Sale) |
16,500 |
|
|
|
|
|
|
|
|
|
|
49,200 |
|
|
49,200 |
|
|
|
|
|
|
|
|
Working Notes: Calculation of Profit or Loss on Sale
Particulars |
Amount |
Value of Machine as on Apr. 01, 2018 |
49,200 |
Less: Depreciation for 6 months |
2,700 |
Value of M1 as on Oct. 01, 2018 |
46,500 |
Less: Sale Value |
30,000 |
Loss on Sale |
16,500 |
|
|
Note:
1. All the expenses incurred up to the date at which machine is put in use will be added to cost of machine.2. The amount spent on repairs is a recurring nature expenses. So, it will not be added to Machine A/c.
3. Cost of Machine = 52,000 + 2,000 + 3,000 + 2,000 + 1,000 = Rs 60,000
Page No 14.51:
Question 12:
Modern Ltd. purchased a machinery on 1st August, 2016 for ₹ 60,000. On 1st October, 2017, it purchased another machine for ₹ 20,000 plus CGST and SGST @ 6% each. On 30th June, 2018, it sold the first machine purchased in 2016 for ₹ 38,500 charging IGST @ 12%. Depreciation is provided @ 20% p.a. on the original cost each year. Accounts are closed on 31st March every year. Prepare the Machinery Account for three years.
Answer:
Books of Modern Ltd. Machinery Account |
|||||||||||
Dr. |
|
Cr. |
|||||||||
Date |
Particulars |
J.F. |
Amount (₹) |
Date |
Particulars |
J.F. |
Amount (₹) |
||||
2016 |
|
2017 |
|
||||||||
Aug.01 |
Bank (M1) |
|
60,000 |
March 31 |
Depreciation |
|
|
||||
|
|
|
|
|
M1 (for 8 months) |
|
8,000 |
||||
|
|
|
|
March 31 |
Balance c/d |
|
52,000 |
||||
|
|
|
60,000 |
|
|
|
60,000 |
||||
2017 |
|
|
|
2018 |
|
|
|
||||
April 01 |
Balance b/d |
|
52,000 |
March 31 |
Depreciation |
|
|
||||
Oct. 01 |
Bank (M2) |
|
20,000 |
|
M1 |
12,000 |
|
|
|||
|
|
|
|
|
M2 (6 months) |
2,000 |
|
14,000 |
|||
|
|
|
|
March 31 |
Balance c/d |
|
|
||||
|
|
|
|
|
M1 |
40,000 |
|
|
|||
|
|
|
|
|
M2 |
18,000 |
|
58,000 |
|||
|
|
|
72,000 |
|
|
|
72,000 |
||||
2018 |
|
|
|
2019 |
|
|
|
||||
April 01 |
Balance b/d |
|
|
June 30 |
Depreciation (M1) (for 3 months) |
|
3,000 |
||||
|
M1 |
40,000 |
|
|
June 30 |
Bank (M1) |
|
38,500 |
|||
|
M2 |
18,000 |
|
58,000 |
2018 |
|
|
|
|||
June 30 | Profit and Loss (profit) | 1,500 | Mar.31 | Depreciation (M2) | 4,000 | ||||||
|
|
|
|
Mar.31 |
Balance c/d |
|
14,000 |
||||
|
|
|
59,500 |
|
|
|
59,500 |
||||
|
|
|
|
|
|
|
|
Working Notes
1. Calculation of Annual Depreciation
Particulars |
Amount (₹) |
Value on Apr 01, 2018 |
40,000 |
Depreciation for 3 Months |
(3,000) |
Value on June 30, 2018 |
37,000 |
Less: Sales Value of Machine |
(38,500) |
Profit on sale of Machine 1 |
1,500 |
3. Journal entries for purchase and sale with GST
Journal
|
|||||
Date
|
Particulars
|
L.F.
|
Debit
Amount
(₹)
|
Credit
Amount
(₹)
|
|
2017
|
|
|
|
||
Oct 01
|
Machinery A/c |
Dr.
|
20,000
|
|
|
|
Input CGST A/c |
Dr.
|
1,200
|
|
|
|
Input SGST A/c |
Dr.
|
1,200
|
|
|
|
To Bank A/c |
|
|
22,400
|
|
|
(Machinery purchased with CGST and SGST @ 6% each paid) |
|
|
|
|
|
|
|
|
||
2018
|
|
|
|
||
Jun 30
|
Bank A/c |
Dr.
|
43,120
|
|
|
|
To Machinery A/c |
|
|
38,500
|
|
|
To Output IGST A/c (Machinery purchased on 1st Aug, 2015 sold with IGST @ 12%.) |
|
|
4,620
|
|