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11th | Depreciation | Question No. 25 To 27 | Ts Grewal Solution 2022-2023

Question 25:


Following balances appear in the books of M/s. Amrit as on 1st April, 2020:

 

  

`

2020

 

 

1st April

Machinery A/c

60,000

 

Provision for Depreciation A/c

36,000

On 1st April, 2020, they decided to dispose off a machinery for ` 8,400 which was purchased on 1st April, 2016 for ` 16,000.
You are required to prepare the Machinery Account, Provision for Depreciation Account and Machinery Disposal Account for the year ended 31st March, 2021. Depreciation was charged at 10% p.a on Cost following Straight Line Method.

Answer:


Books of M/s. Amrit

Machinery Account

Dr.

 

Cr.

Date

Particulars

J.F.

 (`)

Date

Particulars

J.F.

 (`)

2020

 

 

 

2020

 

 

 

April 01

Balance b/d (44,000 + 16,000)

 

60,000

April 01

Machinery Disposal

 

16,000

 

 

 

 

2021

 

 

 

 

 

 

 

Mar.31

Balance c/d

 

44,000

 

 

 

60,000

 

 

 

60,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for Depreciation Account

Dr.

 

Cr.

Date

Particulars

J.F.

 (`)

Date

Particulars

J.F.

 (`)

2020

 

 

 

2020

 

 

 

April 01

Machinery Disposal (4 years)

 

6,400

April 01

Balance b/d

 

36,000

2021

 

 

 

2021

 

 

 

Mar.31

Balance c/d

 

34,000

Mar.31

Depreciation (on Machine costing Rs 44,000)

 

4,400

 

 

 

40,400

 

 

 

40,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Machinery Disposal Account

Dr.

 

Cr.

Date

Particulars

J.F.

 (`)

Date

Particulars

J.F.

 (`)

2020

 

 

 

2020

 

 

 

April 01

Machinery

 

16,000

April 01

Provision for Depreciation

 

6,400

 

 

 

 

2021

 

 

 

 

 

 

 

Mar.31

Bank (Sale)

 

8,400

 

 

 

 

 

Profit and Loss (Loss)

 

1,200

 

 

 

16,000

 

 

 

16,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Working Note

1. Calculation of profit or loss on Machine Sold:

Particulars

 (`)

Original Cost of Machine Sold on April 01, 2020

16,000

Less: Accumulated Depreciation on Machine Sold (1,600 × 4)

(6,400)

Book Value of April 01, 2020

9,600

Less: Sale Value

(8,400)

Loss on Sale

1,200

 

Question 26:


Ashoka & Co. whose books are closed on 31st March, purchased a machinery for ` 1,50,000 on 1st April, 2019, Additional machinery was acquired for ` 50,000 on 1st October, 2019. Certain machinery which was purchased for ` 50,000 on 1st October, 2019 was sold for ` 40,000 on 30th September, 2021.
Prepare the Machinery Account and Accumulated Depreciation Account for all the years up to the year ended 31st March, 2022. Depreciation is charged @ 10% p.a. on Straight Line Method. Also, show the Machinery Disposal Account.

Answer:


Books of Ashoka & Co.

Machinery Account 

Dr.

 

Cr.

Date

Particulars

J.F.

 (`)

Date

Particulars

J.F.

 (`)

2019

 

 

 

2020

 

 

 

Apr.01

Bank (I)

 

1,50,000

 

 

 

 

Oct 01

Bank (II)

 

50,000

Mar.31

Balance c/d

 

2,00,000

 

 

 

2,00,000

 

 

 

2,00,000

2020

 

 

 

2021

 

 

 

Apr.01

Balance b/d

 

2,00,000

Mar.31

Balance c/d

 

2,00,000

 

 

 

 

 

 

 

 

 

 

 

2,00,000

 

 

 

2,00,000

2021

 

 

 

2021

 

 

 

Apr.01

Balance b/d

 

2,00,000

Sep 30

Machinery Disposal A/c

 

50,000

 

 

 

 

2022

Mar.31,

 

Balance c/d

 

1,50,000

 

 

 

2,00,000

 

 

 

2,00,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated Depreciation Account

Dr.

 

Cr.

Date

Particulars

J.F.

 (`)

Date

Particulars

J.F.

 (`)

 

2020

 

 

 

2019

 

 

 

 

Mar.31

Balance c/d

 

 

Mar. 31

Depreciation

 

 

 

 

I

15,000

 

 

 

I

15,000

 

 

 

 

II

2,500

 

17,500

 

II (for 6 months)

2,500

 

17,500

 

 

 

 

17,500

 

 

 

17,500

 

2021

 

 

 

2020

 

 

 

 

Mar.31

Balance c/d

 

 

Apr. 01

Balance b/d

 

 

 

 

I

30,000

 

 

 

I

15,000

 

 

 

 

II

7,500

 

37,500

2021

II

2,500

 

17,500

 

 

 

 

 

Mar. 31

Depreciation

 

 

 

 

 

 

 

 

I

15,000

 

 

 

 

 

 

 

 

II

5,000

 

20,000

 

 

 

 

37,500

 

 

 

 

37,500

 

2021

 

 

 

2021

 

 

 

 

Sep 30

Machinery disposal (II)

 

10,000

Apr. 01

Balance b/d

 

 

 

Mar.31, 2022

Balance c/d (I)

 

45,000

 

I

30,000

 

 

 

 

 

 

 

 

II

7,500

 

37,500

 

 

 

 

 

2021

Sep 30

 

Depreciation (II)

 

2,500

 

 

 

 

 

Mar. 31

Depreciation (I)

 

15,000

 

 

 

 

55,000

 

 

 

55,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Machinery Disposal Account

Dr.

 

Cr.

Date

Particulars

J.F.

 (`)

Date

Particulars

J.F.

 (`)

2021

 

 

 

2021

 

 

 

Sep 30

Machinery A/c

 

50,000

Sep 30

Accumulated Depreciation A/c

 

10,000

 

 

 

 

Sep 30

Bank A/c

 

40,000

 

 

 

50,000

 

 

 

50,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Working note

        1. Calculation of Profit or Loss on sale of Machine II

 

Particulars

 (`)

Original Cost Oct 01, 2021

50,000

Less: Accumulated Depreciation

(10,000)

Book Value on Sept 30, 2021

40,000

Less: Sale Value

(40,000)

Profit / Loss

NIL

 

Question 27


On 1st April, 2014, Veeru Ltd. purchased a machinery for `2,50,000 and spent `50,0000 on its installation. On 1st July, 2016, 1/3rd of machinery purchased on 1st April, 2014 was sold for `15,000 and a new machinery at the cost of `2,00,000 was purchased on the same date. The company has adopted the method of providing depreciation 15% p.a. on Straight Line Method. Show the Machinery Account, Provision for Depreciation Account and Machinery Disposal Account for three years ended on 31st March, 2015 to 31st March, 2017. (Delhi)

 

Answer


Machinery Account 

Dr.

 

Cr.

Date

Particulars

J.F.

 (`)

Date

Particulars

J.F.

 (`)

2014

 

 

 

2015

 

 

 

April 01

Bank A/c (M1)

 

2,50,000

Mar.31

Balance C/d (M1)

 

3,00,000

April 01

Bank A/c (M1)

 

50,000

 

 

 

 

 

 

 

3.00.000

3.00.000

2015

 

 

 

2016

 

 

 

April 01

Balance B/d (M1)

 

3,00,000

Mar.31

Balance C/d (M1)

 

3,00,000

 

 

 

 

 

 

 

 

 

 

 

3.00.000

 

 

 

3.00.000

 2016

 

 

 

2016

 

 

 

April 31

Balance B/d (M1)

 

3.00.000

July 01

Machinery Disposal A/c (M1)

 

1,00,000

2017

July 01

Bank A/c (M2)

2,00,000

2017

 

 

 

 

 

 

 

Mar.31

Balance c/d

 

 

 

 

 

 

 

M1 – 2,00,000

 

 

 

 

 

 

 

M2 – 2,00,000

 

4,00,000

 

 

 

 

 

 

 

 

 

 

 

5,00,000

 

 

 

5,00,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

P

 

Provision for Depreciation on Machinery Account

 

Dr.

 

Cr.

Date

Particulars

J.F.

 (`)

Date

Particulars

J.F.

 (`)

2015

 

 

 

2015

 

 

 

Mar.31

Balance c/d (M1)

 

45,000

Mar.31

Depreciation A/c

(M1)

 

45,000

 

 

 

45,000

 

 

 

45,000

 

 

 

 

2015

 

 

 

 

 

 

 

April.01

Balance c/d (M1)

 

45,000

2016

 

 

 

2016

 

 

 

Mar.31

Balance c/d (M1)

 

90,000

Mar.31

Depreciation A/c

(M1)

 

45,000

 

 

 

90,000

 

 

 

90,000

2016

 

 

 

2016

 

 

 

July 01

Machinery Disposal A/c (M1)

 

33,750

April.01

Balance c/d (M1)

 

90,000

Mar.31

Balance c/d

 

 

2016

 

 

 

 

M1- 90,000

M1- 22,500

 

1,12,500

July.01

Depreciation A/c

(On 1/3 Part of M1)

 

3,750

 

 

 

 

Mar.31

Depreciation A/c

(On 2/3 of M1) 30,000

 

 

 

 

 

 

 

M2- 22,500

 

52,500

 

 

 

 

 

 

 

 

 

 

 

1,46,250

 

 

 

1,46,250

 

 

 

 

 

 

 

 

M

 

Machinery Disposal Account

 

Dr.

 

Cr.

Date

Particulars

J.F.

 (`)

Date

Particulars

J.F.

 (`)

2016

 

 

 

2016

 

 

 

July 01

Machinery A/c (M1)

 

1,00,000

July 01

Provision for Depreciation on Machinery A/c (M1)

 

33,750

 

 

 

 

July 01

Bank A/c (Sale)

 

15,000

 

 

 

 

July 01

Profit and loss A/c

(Loss)

 

51,250

 

 

 

 

 

 

 

 

 

 

 

1,00,000

 

 

 

1,00,000

 

 

 

 

 

 

 

 

 

 

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