On 1st October, 2021, Meenal Sharma bought a machine for `25,000 on which he spent `5,000 for carriage and freight; `1,000 for brokerage of the middle-man, `4,000 for installation. The machine is depreciated @ 10% p.a. on written down value basis. On 31st March, 2024 the machine was sold to Deepa for `30,500 and `500 was paid as commission to broker through whom the sales was effected. Find out the profit or loss on sale of machine if accounts are closed on 31st March, every year.
Answer:
|
Machinery
Account |
|||||||||||
|
Dr. |
|
Cr. |
|
||||||||
|
Date |
Particulars |
J.F. |
(`) |
Date |
Particulars |
J.F. |
(`) |
||||
|
2021 |
|
|
|
2022 |
|
|
|
||||
|
Oct 01 |
Bank
(25,000+5,000+1,000+4,000) |
|
35,000 |
Mar.31 |
Depreciation (for
6 months) |
|
1,750 |
||||
|
|
|
|
|
Mar.31 |
Balance c/d |
|
33,250 |
||||
|
|
|
|
35,000 |
|
|
|
35,000 |
||||
|
2022 |
|
|
|
2023 |
|
|
|
||||
|
Apr.01 |
Balance b/d |
|
33,250 |
Mar.31 |
Depreciation |
|
3,325 |
||||
|
|
|
|
|
Mar.31 |
Balance c/d |
|
29,925 |
||||
|
|
|
|
33,250 |
|
|
|
33,250 |
||||
|
2023 |
|
|
|
2024 |
|
|
|
||||
|
Apr.01 |
Balance b/d |
|
29,925 |
Mar.31 |
Depreciation |
|
2,993 |
||||
|
2024 |
|
|
3,068 |
Mar.31 |
Bank A/c (30,500
– 500) |
|
30,000 |
||||
|
|
|
|
32,993 |
|
|
|
32,993 |
||||
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Working Note:
(1)
Calculation
of Profit or Loss on sale of Machine I:
|
Particulars |
(`) |
|
Book Value of Machine on Apr. 01,
2023 |
29,925 |
|
Less: Depreciation for the
year |
(2,993) |
|
Book Value of
Machine I on Mar. 31, 2024 |
26,932 |
|
Less: Sale Value (30,500 –
500) |
(30,000) |
|
Profit on Sale |
3,068 |
Question 26:
A company purchased on 1st July, 2020 machinery costing `30,000. It further
purchased machinery on 1st January, 2021 costing
`20,000 and on 1st October, 2021 costing
`10,000. On 1st April, 2022, one-third of the machinery installed on 1st
July, 2020 became obsolete and was sold for
`3,000. The company follows financial year as accounting year.
Show how the Machinery Account would appear in the books of company if
depreciation is charged @ 10% p.a. on Written Down Value Method.
Answer:
|
Machinery
Account |
|||||||||||||
|
Dr. |
|
Cr. |
|||||||||||
|
Date |
Particulars |
J.F. |
(Rs) |
Date |
Particulars |
J.F. |
(Rs) |
||||||
|
2020 |
|
|
|
2021 |
|
|
|
||||||
|
July 01 |
Bank |
|
|
Mar.31 |
Depreciation |
|
|
||||||
|
|
I(2/3) |
20,000 |
|
|
|
I(2/3) |
1,500 |
|
|
||||
|
2021 |
I(1/3) |
10,000 |
|
30,000 |
|
I(1/3) |
750 |
|
|
||||
|
Jan.01 |
Bank (II) |
|
20,000 |
|
II |
500 |
|
2,750 |
|||||
|
|
|
|
|
Mar.31 |
Balance c/d |
|
|
||||||
|
|
|
|
|
|
I(2/3) |
18,500 |
|
|
|||||
|
|
|
|
|
|
I(1/3) |
9,250 |
|
|
|||||
|
|
|
|
|
|
II |
19,500 |
|
47,250 |
|||||
|
|
|
|
50,000 |
|
|
|
|
50,000 |
|||||
|
2021 |
|
|
|
2022 |
|
|
|
||||||
|
Apr 01 |
Balance b/d |
|
|
Mar
31 |
Depreciation |
|
|
||||||
|
|
I(2/3) |
18,500 |
|
|
|
I(2/3) |
1,850 |
|
|
||||
|
|
I(1/3) |
9,250 |
|
|
|
I(1/3) |
925 |
|
|
||||
|
|
II |
19,500 |
|
47,250 |
|
II |
1,950 |
|
|
||||
|
Oct 01 |
Bank (III) |
|
10,000 |
|
III |
500 |
|
5,225 |
|||||
|
|
|
|
|
Mar
31 |
Balance c/d |
|
|
||||||
|
|
|
|
|
|
I(2/3) |
16,650 |
|
|
|||||
|
|
|
|
|
|
I(1/3) |
8,325 |
|
|
|||||
|
|
|
|
|
|
II |
17,550 |
|
|
|||||
|
|
|
|
|
|
III |
9,500 |
|
52,025 |
|||||
|
|
|
|
57,250 |
|
|
|
57,250 |
||||||
|
2022 |
|
|
|
2022 |
|
|
|
||||||
|
Apr.01 |
Balance b/d |
|
|
Apr.01 |
Bank (I)(1/3) |
|
3,000 |
||||||
|
|
I(2/3) |
16,650 |
|
|
Apr.01 |
Profit and Loss
(Loss) |
|
5,325 |
|||||
|
|
I(1/3) |
8,325 |
|
|
Mar.31, |
Depreciation |
|
|
|||||
|
|
II |
17,550 |
|
|
2023 |
I(2/3) |
1,665 |
|
|
||||
|
|
III |
9,500 |
|
52,025 |
|
II |
1,755 |
|
|
||||
|
|
|
|
|
|
III |
950 |
|
4,370 |
|||||
|
|
|
|
|
Mar.31 |
Balance c/d |
|
|
||||||
|
|
|
|
|
|
I(2/3) |
14,985 |
|
|
|||||
|
|
|
|
|
|
II |
15,795 |
|
|
|||||
|
|
|
|
|
|
III |
8,550 |
|
39,330 |
|||||
|
|
|
|
52,025 |
|
|
|
|
52,025 |
|||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working Note:
(1) Calculation of Profit or
Loss on Sale of Plant I(1/3):
|
Particulars |
(Rs) |
|
Book Value of Plant I (1/3) as on Apr 01,
2022 |
8,325 |
|
Less:
Sale Value |
(3,000) |
|
Loss on Sale |
5,325 |
Question
27:
Following balances appear in the books of M/s. Amrit
as on 1st April, 2023:
|
|
|
` |
|
2023 |
|
|
|
1st April |
Machinery
A/c |
60,000 |
|
|
Provision
for Depreciation A/c |
36,000 |
On
1st April, 2023, they decided to dispose off a machinery for
`8,400 which was
purchased on 1st April, 2019 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, 2024.
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. |
(`) |
||
|
2023 |
|
|
|
2023 |
|
|
|
||
|
April 01 |
Balance b/d
(44,000 + 16,000) |
|
60,000 |
April
01 |
Machinery Disposal |
|
16,000 |
||
|
|
|
|
|
2024 |
|
|
|
||
|
|
|
|
|
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. |
(`) |
||
|
2023 |
|
|
|
2023 |
|
|
|
||
|
April 01 |
Machinery
Disposal (4 years) |
|
6,400 |
April
01 |
Balance b/d |
|
36,000 |
||
|
2024 |
|
|
|
2024 |
|
|
|
||
|
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. |
(`) |
||
|
2023 |
|
|
|
2023 |
|
|
|
||
|
April 01 |
Machinery |
|
16,000 |
April
01 |
Provision for Depreciation |
|
6,400 |
||
|
|
|
|
|
2024 |
|
|
|
||
|
|
|
|
|
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, 2019 |
16,000 |
|
Less: Accumulated Depreciation on Machine
Sold (1,600 × 4) |
(6,400) |
|
Book Value of April 01, 2023 |
9,600 |
|
Less: Sale Value |
(8,400) |
|
Loss on Sale |
1,200 |
Question
28:
Ashoka & Co. whose books are closed on
31st March, purchased a machinery for `1,50,000 on 1st April, 2021, Additional machinery
was acquired for `50,000 on 1st October, 2021. Certain
machinery which was purchased for `50,000 on 1st October, 2021 was sold for `40,000
on 30th September, 2023.
Prepare the Machinery Account and Accumulated Depreciation Account for all the
years up to the year ended 31st March, 2024. 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. |
(`) |
||
|
2021 |
|
|
|
2022 |
|
|
|
||
|
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 |
||
|
2022 |
|
|
|
2023 |
|
|
|
||
|
Apr.01 |
Balance b/d |
|
2,00,000 |
Mar.31 |
Balance c/d |
|
2,00,000 |
||
|
|
|
|
|
|
|
|
|
||
|
|
|
|
2,00,000 |
|
|
|
2,00,000 |
||
|
2023 |
|
|
|
2023 |
|
|
|
||
|
Apr.01 |
Balance b/d |
|
2,00,000 |
Sep
30 |
Machinery
Disposal A/c |
|
50,000 |
||
|
|
|
|
|
2024 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. |
(`) |
|
|||||
|
2022 |
|
|
|
2021 |
|
|
|
|
|||||
|
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 |
|
|||||
|
2023 |
|
|
|
2022 |
|
|
|
|
|||||
|
Mar.31 |
Balance c/d |
|
|
Apr.
01 |
Balance b/d |
|
|
|
|||||
|
|
I |
30,000 |
|
|
|
I |
15,000 |
|
|
|
|||
|
|
II |
7,500 |
|
37,500 |
2023 |
II |
2,500 |
|
17,500 |
|
|||
|
|
|
|
|
Mar.
31 |
Depreciation |
|
|
|
|||||
|
|
|
|
|
|
I |
15,000 |
|
|
|
||||
|
|
|
|
|
|
II |
5,000 |
|
20,000 |
|
||||
|
|
|
|
37,500 |
|
|
|
|
37,500 |
|
||||
|
2023 |
|
|
|
2023 |
|
|
|
|
|||||
|
Sep 30 |
Machinery disposal (II) |
|
10,000 |
Apr. 01 |
Balance b/d |
|
|
|
|||||
|
Mar.31,
2024 |
Balance c/d (I) |
|
45,000 |
|
I |
30,000 |
|
|
|
||||
|
|
|
|
|
|
II |
7,500 |
|
37,500 |
|
||||
|
|
|
|
|
2023 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. |
(`) |
||
|
2023 |
|
|
|
2023 |
|
|
|
||
|
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, 2023 |
40,000 |
|
Less: Sale Value |
(40,000) |
|
Profit / Loss |
NIL |
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Ts Grewal Solution 2024-2025
Class 11th