Double
Entry Book Keeping Ts Grewal 2025 for Class 11
Commerce Accountancy Chapter 11 -
Depreciation
Question
1:
Tushar
purchased a machine for ₹90,000. Expenses incurred on its cartage and instalation are ₹10,000. The residual value at the
end of its expected useful life of 10 years is estimated at ₹20,000.
Calculate the amount of depreciation by Straight Line Method for the first year
ending 31st March, 2025, if the machine is purchased on:
(a) 1st April,
2024. (b) 1st July, 2024.
(c) 1st
October, 2024. (d) 1st January, 2025.
Answer:
Cost of
machinery = ₹90,000 + ₹10,000 = ₹1,00,000
Residual
value= ₹20,000
Expected
useful life of 10 years
Formula
for calculating depreciation = Cost of asset - Residual value of asset / Life
expectancy
(a)
Depreciation if Purchased on 1st April, 2024.
Annual
Depreciation = ₹1,00,000 -
₹80,000÷10=₹8,000
(b)
Depreciation if Purchased on 1st July, 2024.
Depreciation
for 9 Months = ₹1,00,000 -
₹80,000÷10/100×9/12=₹6,000
(c)
Depreciation if Purchased on 1st October, 2024
Depreciation
for 6 Months = ₹1,00,000 -
₹80,000÷10/100×6/12=₹4,000
(c)
Depreciation if Purchased on (d) 1st January, 2025
Depreciation
for 3 Months = ₹1,00,000 -
₹80,000÷10/100×3/12=₹2,000
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. 2024, 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, 2025.
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, 2025) =60,000×9 ÷12= `45,000
Question 4:
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%
|
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Ts Grewal Solution 2025-2026
Class 11th