Question
21:
A boiler was
purchased from abroad for ₹10,000. Shipping and forwarding charges ₹2,000,
Import duty ₹7,000 and expenses of installation amounted to ₹1,000.
Calculate the Depreciation for the first three years (separately for each year)
@ 10% p.a. on Diminishing Balance Method.
Answer:
|
Boiler Account |
|||||||||
|
Dr. |
|
Cr. |
|||||||
|
Date |
Particulars |
J.F. |
(₹) |
Date |
Particulars |
J.F. |
(₹) |
||
|
I year |
|
|
|
I year |
|
|
|
||
|
Jan.01 |
Bank (10,000 + 2,000 + 7,000 + 1,000) |
|
20,000 |
Dec.31 |
Depreciation |
|
2,000 |
||
|
|
|
|
|
|
Balance c/d |
|
18,000 |
||
|
|
|
|
20,000 |
|
|
|
20,000 |
||
|
II year |
|
|
|
II year |
|
|
|
||
|
Jan.01 |
Balance b/d |
|
18,000 |
Dec.31 |
Depreciation |
|
1,800 |
||
|
|
|
|
|
Dec.31 |
Balance c/d |
|
16,200 |
||
|
|
|
|
18,000 |
|
|
|
18,000 |
||
|
III year |
|
|
|
III year |
|
|
|
||
|
Jan.01 |
Balance b/d |
|
16,200 |
Dec.31 |
Depreciation |
|
1,620 |
||
|
|
|
|
|
Dec.31 |
Balance c/d |
|
14,580 |
||
|
|
|
|
16,200 |
|
|
|
16,200 |
||
|
|
|
|
|
|
|
|
|
||
Question 22:
The original
cost of furniture amounted to ₹4,000 and it is decided to write off 5% on
the original cost as Depreciation at the end of each year. Show the Ledger
Account as it will appear during the first four years. Show also how the same
account will appear if it was decided to write off 5% p.a. on the diminishing
balance of the asset each year.
Answer:
|
Furniture Account (Original Cost Method) |
|||||||||
|
Dr. |
|
Cr. |
|||||||
|
Date |
Particulars |
J.F. |
(₹) |
Date |
Particulars |
J.F. |
(₹) |
||
|
I year |
|
|
|
I year |
|
|
|
||
|
Jan.01 |
Bank |
|
4,000 |
Dec.31 |
Depreciation |
|
200 |
||
|
|
|
|
|
Dec.31 |
Balance c/d |
|
3,800 |
||
|
|
|
|
4,000 |
|
|
|
4,000 |
||
|
II year |
|
|
|
II year |
|
|
|
||
|
Jan.01 |
Balance b/d |
|
3,800 |
Dec.31 |
Depreciation |
|
200 |
||
|
|
|
|
|
Dec.31 |
Balance c/d |
|
3,600 |
||
|
|
|
|
3,800 |
|
|
|
3,800 |
||
|
III year |
|
|
|
III year |
|
|
|
||
|
Jan.01 |
Balance b/d |
|
3,600 |
Dec.31 |
Depreciation |
|
200 |
||
|
|
|
|
|
Dec.31 |
Balance c/d |
|
3,400 |
||
|
|
|
|
3,600 |
|
|
|
3,600 |
||
|
IV year |
|
|
|
IV year |
|
|
|
||
|
Jan.01 |
Balance b/d |
|
3,400 |
Dec.31 |
Depreciation |
|
200 |
||
|
|
|
|
|
Dec.31 |
Balance c/d |
|
3,200 |
||
|
|
|
|
3,400 |
|
|
|
3,400 |
||
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
Note: Depreciation 4,000×5/100= ₹200 p.a.
|
Furniture Account (Diminishing Balance Method) |
|||||||||
|
Dr. |
|
Cr. |
|||||||
|
Date |
Particulars |
J.F. |
(₹) |
Date |
Particulars |
J.F. |
(₹) |
||
|
I year |
|
|
|
I year |
|
|
|
||
|
Jan.01 |
Bank |
|
4,000 |
Dec.31 |
Depreciation |
|
200 |
||
|
|
|
|
|
Dec.31 |
Balance c/d |
|
3,800 |
||
|
|
|
|
4,000 |
|
|
|
4,000 |
||
|
II year |
|
|
|
II year |
|
|
|
||
|
Jan.01 |
Balance b/d |
|
3,800 |
Dec.31 |
Depreciation |
|
190 |
||
|
|
|
|
|
Dec.31 |
Balance c/d |
|
3,610 |
||
|
|
|
|
3,800 |
|
|
|
3,800 |
||
|
III year |
|
|
|
III year |
|
|
|
||
|
Jan.01 |
Balance b/d |
|
3,610 |
Dec.31 |
Depreciation |
|
181 |
||
|
|
|
|
|
Dec.31 |
Balance c/d |
|
3,429 |
||
|
|
|
|
3,610 |
|
|
|
3,610 |
||
|
IV year |
|
|
|
IV year |
|
|
|
||
|
Jan.01 |
Balance b/d |
|
3,429 |
Dec.31 |
Depreciation |
|
171 |
||
|
|
|
|
|
Dec.31 |
Balance c/d |
|
3,258 |
||
|
|
|
|
3,429 |
|
|
|
3,429 |
||
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
Note: Depreciation is
calculated on opening balance every year By using
below formula
Annual Depreciation = Opening Balance ×5/100
Question 23:
Kabir bought a machine for ₹25,000
on which he spent ₹5,000 for carriage and freight. ₹1,000
for brokerage of the middleman, ₹3,500 for installation and ₹500
for an iron pad. The machine is depreciated @ 10% p.a. on Written Down Value basis. After three years, the machine was sold to
Yash for ₹30,500 and ₹500 was
paid as commission to the broker through whom the sale was effected.
Find out the profit and loss on sale of machine.
Answer:
|
Books of Kabir Machinery Account |
|||||||||
|
Dr. |
|
Cr. |
|||||||
|
Date |
Particulars |
J.F. |
(₹) |
Date |
Particulars |
J.F. |
(₹) |
||
|
I year |
|
|
|
I year |
|
|
|
||
|
Jan.01 |
Bank (25,000 + 5,000 + 1,000 + 3,500 + 500) |
|
35,000 |
Dec.31 |
Depreciation |
|
3,500 |
||
|
|
|
|
|
Dec.31 |
Balance c/d |
|
31,500 |
||
|
|
|
|
35,000 |
|
|
|
35,000 |
||
|
II year |
|
|
|
II year |
|
|
|
||
|
Jan.01 |
Balance b/d |
|
31,500 |
Dec.31 |
Depreciation |
|
3,150 |
||
|
|
|
|
|
Dec.31 |
Balance c/d |
|
28,350 |
||
|
|
|
|
31,500 |
|
|
|
31,500 |
||
|
III year |
|
|
|
III year |
|
|
|
||
|
Jan.01 |
Balance b/d |
|
28,350 |
Dec.31 |
Depreciation |
|
2,835 |
||
|
|
|
|
|
Dec.31 |
Balance c/d |
|
25,515 |
||
|
|
|
|
28,350 |
|
|
|
28,350 |
||
|
IV year |
|
|
|
IV year |
|
|
|
||
|
Jan.01 |
Balance b/d |
|
25,515 |
Jan.01 |
Bank (30,500 – 500 brokerage) |
|
30,000 |
||
|
Dec.31 |
Profit and Loss (Profit) |
|
4,485 |
|
|
|
|
||
|
|
|
|
30,000 |
|
|
|
30,000 |
||
|
|
|
|
|
|
|
|
|
||
Question 24:
Rajesh purchased on 1st April,
2023, a machine for ₹6,000. On 1st October, 2023, he also purchased
another machine for ₹5,000. On 1st October, 2024, he sold the machine
purchased on 1st April, 2023 for ₹4,000.
It was decided that Depreciation @ 10% p.a. was to be written off every year
under Diminishing Balance Method.
Assuming the accounts were closed on 31st March every year, show the Machinery
Account for the years ended 31st March, 2024 and 2025.
Answer:
|
Books of Babu Machinery Account |
|||||||||||
|
Dr. |
|
Cr. |
|||||||||
|
Date |
Particulars |
J.F. |
(₹) |
Date |
Particulars |
J.F. |
(₹) |
||||
|
2022 |
|
|
|
2023 |
|
|
|
||||
|
Apr. 01 |
Bank (I) |
|
6,000 |
Mar. 31 |
Depreciation |
|
|
||||
|
Oct. 01 |
Bank (II) |
|
5,000 |
|
I |
600 |
|
|
|||
|
|
|
|
|
|
II (for 6 months) |
250 |
|
850 |
|||
|
|
|
|
|
Mar. 31 |
Balance c/d |
|
|
||||
|
|
|
|
|
|
I |
5,400 |
|
|
|||
|
|
|
|
|
|
II |
4,750 |
|
10,150 |
|||
|
|
|
|
11,000 |
|
|
|
11,000 |
||||
|
2023 |
|
|
|
2023 |
|
|
|
||||
|
Apr. 01 |
Balance b/d |
|
|
Oct. 01 |
Depreciation (I) (for 6 months) |
|
270 |
||||
|
|
I |
5,400 |
|
|
Oct. 01 |
Bank (I) |
|
4,000 |
|||
|
|
II |
4,750 |
|
10,150 |
Oct. 01 |
Profit and Loss (Loss) |
|
1,130 |
|||
|
|
|
|
|
2025 |
|
|
|
||||
|
|
|
|
|
Mar. 31 |
Depreciation (II) |
|
475 |
||||
|
|
|
|
|
Mar. 31 |
Balance c/d (II) |
|
4,275 |
||||
|
|
|
|
10,150 |
|
|
|
10,150 |
||||
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Working Note
(1) Calculation of profit or loss on sale of machine:
|
Particulars |
(₹) |
|
Book Value of Machinery Apr. 01, 2023 |
5,400 |
|
Less: Depreciation (for 6 Months) |
(270) |
|
Book Value of Machinery on Oct. 01 2023 |
5,130 |
|
Less: Sale |
(4,000) |
|
Loss on Sale |
1,130 |
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Ts Grewal Solution 2025-2026
Class 11th