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:
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
3:
On 1st July. 2023, Raja Ltd. purchased a
second-hand machine for `5,00,000
and spent `1,00,000 on its cartage, repairs
and installation.
Calculate the
amount of depreciation @ 10% p.a. according to Straight Line Method for the
year ending on 31st March, 2024.
Answer:
Total cost = purchased
value + cartage, repairs and installation expenses
Total cost = 5,00,000 +1,00,000 = ` 6,00,000
Annual
Depreciation = 6,00,000 ×10 ÷100 = `60,000
Depreciation from (1st July. 2023 to 31st March, 2024) =60,000×9 ÷12= `45,000
Question 4:
Mohan & Co. purchased machinery for `21,000 on 1st April, 2021. 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 Mohan & Com. Machinery
Account |
|||||||||
|
Dr. |
|
Cr. |
|||||||
|
Date |
Particulars |
J.F. |
(`) |
Date |
Particulars |
J.F. |
(`) |
||
|
2021 |
|
|
|
2021 |
|
|
|
||
|
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 |
||
|
2022 |
|
|
|
2022 |
|
|
|
||
|
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 |
||
|
2023 |
|
|
|
2024 |
|
|
|
||
|
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 |
||
|
|
|
|
|
|
|
|
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Ts Grewal Solution 2024-2025
Class 11th