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
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Machinery
Account |
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Dr. |
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Cr. |
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Date |
Particulars |
J.F. |
(`) |
Date |
Particulars |
J.F. |
(`) |
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2014 |
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2015 |
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April 01 |
Bank A/c (M1) |
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2,50,000 |
Mar.31 |
Balance C/d (M1) |
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3,00,000 |
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April 01 |
Bank A/c (M1) |
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50,000 |
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3.00.000 |
3.00.000 |
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2015 |
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2016 |
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April 01 |
Balance B/d (M1) |
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3,00,000 |
Mar.31 |
Balance C/d (M1) |
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3,00,000 |
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3.00.000 |
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3.00.000 |
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2016 |
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2016 |
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April 31 |
Balance B/d (M1) |
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3.00.000 |
July 01 |
Machinery Disposal A/c (M1) |
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1,00,000 |
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2017 July 01 |
Bank A/c (M2) |
2,00,000 |
2017 |
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Mar.31 |
Balance c/d |
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M1 – 2,00,000 |
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M2 –
2,00,000 |
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4,00,000 |
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5,00,000 |
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5,00,000 |
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P
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Provision
for Depreciation on Machinery Account |
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Dr. |
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Cr. |
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Date |
Particulars |
J.F. |
(`) |
Date |
Particulars |
J.F. |
(`) |
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2015 |
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2015 |
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Mar.31 |
Balance c/d (M1) |
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45,000 |
Mar.31 |
Depreciation A/c (M1) |
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45,000 |
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45,000 |
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45,000 |
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2015 |
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April.01 |
Balance c/d (M1) |
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45,000 |
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2016 |
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2016 |
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Mar.31 |
Balance c/d (M1) |
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90,000 |
Mar.31 |
Depreciation A/c (M1) |
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45,000 |
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90,000 |
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90,000 |
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2016 |
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2016 |
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July 01 |
Machinery Disposal A/c (M1) |
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33,750 |
April.01 |
Balance c/d (M1) |
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90,000 |
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Mar.31 |
Balance c/d |
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2016 |
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M1- 90,000 M1-
22,500 |
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1,12,500 |
July.01 |
Depreciation A/c (On 1/3
Part of M1) |
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3,750 |
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Mar.31 |
Depreciation A/c (On 2/3 of M1) 30,000 |
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M2- 22,500 |
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52,500 |
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1,46,250 |
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1,46,250 |
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M
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Machinery
Disposal Account |
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Dr. |
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Cr. |
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Date |
Particulars |
J.F. |
(`) |
Date |
Particulars |
J.F. |
(`) |
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2016 |
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2016 |
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July 01 |
Machinery A/c (M1) |
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1,00,000 |
July 01 |
Provision for Depreciation on Machinery A/c (M1) |
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33,750 |
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July 01 |
Bank A/c
(Sale) |
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15,000 |
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July 01 |
Profit and loss A/c (Loss) |
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51,250 |
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1,00,000 |
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1,00,000 |
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Question 30:
From the books
of Harish Traders following information as on 1st April, 2024 is extracted:
Plant and Machinery Account
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`25,00,000
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Provision for Depreciation Account
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`5,80,000
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Depreciation is
charged on the plant at 20% p.a. by the Diminishing Balance Method. A piece of
machinery purchased on lst April, 2022 for `5,00,000 was sold on lst October,
2024 for `3,00,000. Prepare the Plant and
Machinery Account and Provision for Depreciation Account for the year ended
31st March, 2025. Also, prepare Machinery Disposal Account.
Answer:
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Books of Harish Traders Machinery
Account |
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Dr. |
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Cr. |
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Date |
Particulars |
J.F. |
(`) |
Date |
Particulars |
J.F. |
(`) |
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2024 |
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2024 |
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Apr.01 |
Balance b/d |
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25,00,000 |
Oct 01 |
Machinery Disposal |
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5,00,000 |
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2025 Mar.31, |
Balance c/d |
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20,00,000 |
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25,00,000 |
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25,00,000 |
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Accumulated
Depreciation Account |
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Dr. |
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Cr. |
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Date |
Particulars |
J.F. |
(`) |
Date |
Particulars |
J.F. |
(`) |
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2024 |
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2024 |
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Oct.
01 |
Machinery disposal |
2,12,000 |
Apr.01 |
Balance b/d |
5,80,000 |
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2025 |
Oct.
01 |
Depreciation A/c |
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32,000 |
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Mar.31 |
Balance c/d |
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7,20,000 |
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(for 6
months sold asset) |
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2025 |
Depreciation A/c |
3,20,000 |
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Mar.31 |
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9,32,000 |
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9,32,000 |
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Machinery
Disposal Account |
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Dr. |
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Cr. |
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Date |
Particulars |
J.F. |
(`) |
Date |
Particulars |
J.F. |
(`) |
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2024 |
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2024 |
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Oct. 01 |
Machinery A/c |
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5,00,000 |
Oct. 01 |
Accumulated Depreciation A/c |
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2,12,000 |
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Oct. 01 |
Profit
and loss A/c (Profit) |
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12,000 |
Oct. 01 |
Bank A/c |
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3,00,000 |
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5,12,000 |
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5,12,000 |
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Working
note
1. Calculation of Profit or Loss on sale of Machine
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Particulars |
(`) |
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Original Cost April 01, 2022 |
5,00,000 |
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Less: Accumulated Depreciation |
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(2022-2023)
1,00,000 |
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(2023-2024) 80,000 |
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(1.4.2024-1.10.2024
[6 month]) 32,000 |
2,12,000 |
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Book Value on 1.10.2024 |
2,88,000 |
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Less: Sale Value |
3,00,000 |
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Profit on sale of machine |
12,000 |
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Ts Grewal Solution 2024-2025
Class 11th