commercemine

11th | Depreciation | Question No. 1 To 4 | Ts Grewal Solution 2022-2023

Question 1:


Calculate annual depreciation and rate of depreciation under Straight Line Method in each of the alternative cases:

Case

Purchase of Machinery

Installation Charges

Estimated Scrap Value

Estimated Useful Life

(In Years)

(a)

1,80,000

20,000

10,000

5

(b)

4,75,000

25,000

50,000

5

(c)

90,000

10,000

20,000

10

(d)

3,40,000

60,000

40,000

10

(e)

90,000

10,000

20,000

4

Answer:


Case

Amount of Annual Depreciation

Rate of Depreciation

 

Total Cost of Assets – Scarp value ÷ Useful life

Amount Depreciation × 100 ÷ Total Cost of Assets

1

= (1,80,000+20,000) - 10,000 ÷ 5

= 38,000

38,000×100÷2,00,000 =19%

2

=(4,75,000+25,000) - 50,000 ÷ 5

=90,000

90,000×100÷5,00,000 =18%

3

= (90,000+10,000) - 20,000 ÷ 10

=8,000

8,000×100÷ 1,00,000 = 8%

4

=(3,40,000+60,000) - 40,000 ÷ 10

=36,000

36,000×100÷ 4,00,000 = 9%

5

= (90,000+10,000) - 20,000 ÷ 4

=20,000

20,000×100÷1,00,000 = 20%

 

Question 2:


Ram & Co. purchased machinery for ` 21,000 on 1st April, 2019. The estimated useful life of the machinery is 10 years, after which its realisable value will be `1,000. Determine the amount of annual depreciation according to the Straight Line Method and prepare Machinery Account for the first three years. The books of account are closed on 31st March every year.

 

Answer:


Book of Ram & Com.

Machinery Account 

Dr.

 

Cr.

Date

Particulars

J.F.

 ( `)

Date

Particulars

J.F.

 ( `)

2019

 

 

 

2020

 

 

 

April 01

Bank A/c

 

21,000

Mar.31

Depreciation A/c

 

2,000

 

 

 

 

Mar.31

Balance c/d

 

19,000

 

 

 

21,000

 

 

 

21,000

2020

 

 

 

2021

 

 

 

April 01

Balance b/d

 

19,000

Mar.31

Depreciation A/c

 

2,000

 

 

 

 

Mar.31

Balance c/d

 

17,000

 

 

 

19,000

 

 

 

19,000

2021

 

 

 

2022

 

 

 

April 01

Balance b/d

 

17,000

Mar.31

Depreciation A/c

 

2,000

 

 

 

 

Mar.31

Balance c/d

 

15,000

 

 

 

17,000

 

 

 

17,000

 

 

 

 

 

 

 

 

Question 3:


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:


Amount of Annual Depreciation=Cost of Machine−Scrap Value of Machine Life in Years                                       

   =1,20,000−72,000/4=Rs 12,000

     Rate of Depreciation=Amount of DepreciationCost of Machine×100                                  

              =12,000/1,20,000×100=10%p.a.

Question 4:


1st April, 2019, 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.

 ( `)

Date

Particulars

J.F.

 ( `)

2019

 

 

 

2020

 

 

 

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

2020

 

 

 

2021

 

 

 

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

2021

 

 

 

2022

 

 

 

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:

Depreciation p.a.=4,00,000+50,000-50,000(Scrap Value)10 years                     

    = ` 40,000 p.a.

 

Click below for more Questions

Ts Grewal Solution 2022-2023

Class 11th

Click on below links for 

11th TS Grewal’s Accountancy Solutions

Ts Grewal Solution 2022-2023

Ts Grewal Solution 2021-2022

Ts Grewal Solution 2020-2021