Rajesh purchased on 1st April,
2022, a machine for `6,000.
On 1st October, 2022, he also purchased another machine for `5,000. On 1st
October, 2023, he sold the machine purchased on 1st April, 2022 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, 2023 and 2024.
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 |
|||
|
|
|
|
|
2024 |
|
|
|
||||
|
|
|
|
|
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 |
Question 22:
A company purchased a machinery for `50,000 on 1st October, 2021. Another machinery costing `10,000 was purchased on 1st December, 2022. On 31st March, 2024, the machinery purchased in 2021 was sold at a loss of `5,000. The company charges depreciation @ 15% p.a. on Diminishing Balance Method. Accounts are closed on 31st March every year. Prepare the Machinery Account for 3 years.
Answer:
|
Machinery
Account |
|||||||||||||
|
Dr. |
|
Cr. |
|||||||||||
|
Date |
Particulars |
J.F. |
(`) |
Date |
Particulars |
J.F. |
(`) |
||||||
|
2021 |
|
|
|
2022 |
|
|
|
||||||
|
Oct.01 |
Bank (I) |
|
50,000 |
Mar.31 |
Depreciation (for
6 Months) |
|
3,750 |
||||||
|
|
|
|
|
Mar.31 |
Balance c/d |
|
46,250 |
||||||
|
|
|
|
50,000 |
|
|
|
50,000 |
||||||
|
2022 |
|
|
|
2023 |
|
|
|
||||||
|
Apr.01 |
Balance b/d (I) |
|
46,250 |
Mar.31 |
Depreciation |
|
|
||||||
|
Dec.01 |
Bank (II) |
|
10,000 |
|
I |
6,938 |
|
|
|||||
|
|
|
|
|
|
II |
500 |
|
7,438 |
|||||
|
|
|
|
|
Mar.31 |
Balance c/d |
|
|
||||||
|
|
|
|
|
|
I |
39,312 |
|
|
|||||
|
|
|
|
|
|
II |
9,500 |
|
48,812 |
|||||
|
|
|
|
56,250 |
|
|
|
56,250 |
||||||
|
2023 |
|
|
|
2024 |
|
|
|
||||||
|
Apr.01 |
Balance b/d |
|
|
Mar.31 |
Depreciation |
|
|
||||||
|
|
I |
39,312 |
|
|
|
I |
5,897 |
|
|
||||
|
|
II |
9,500 |
|
48,812 |
|
II |
1,425 |
|
7,322 |
||||
|
|
|
|
|
Mar.31 |
Bank (I) |
|
28,415 |
||||||
|
|
|
|
|
Mar.31 |
Profit and Loss
(Loss) |
|
5,000 |
||||||
|
|
|
|
|
Mar.31 |
Balance c/d (II) |
|
8,075 |
||||||
|
|
|
|
48,812 |
|
|
|
48,812 |
||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working
Note
(1) Calculation of profit or
loss on sale of machine:
|
Particulars |
(`) |
|
Book Value of
Machine I on Apr. 01, 2023 |
39,312 |
|
Less: Depreciation (39,312 ×
15%) |
5,897 |
|
Book Value of
Machine I on Mar. 31, 2024 |
33,415 |
|
Less: Sale Value |
(28,415) |
|
Loss on Sale of
Machine I |
5,000 |
Question 23:
On 1st April,
2021, a machinery was purchased for `20,000. On 1st October, 2022 another machine
was purchased for `10,000 and on 1st April, 2023, one more
machine was purchased for `5,000. The firm depreciates its machinery @
10% p.a. on the Diminishing Balance Method.
What is the amount of Depreciation for the years ended 31st March, 2022, 2023
and 2024? What will be the balance in Machinery Account as on 31st March, 2024?
Answer:
I. Calculation of Depreciation
from April 01, 2021 to March 31, 2024
Depreciation Rate:
10% p.a. on Diminishing Balance Method
|
Year |
Machinery |
Date
of Purchase |
Value |
No.
of Months |
Amt.
of Dep. |
Total
Dep. |
|
March
31, 2021 |
M1 |
April
01, 2019 |
20,000 |
12 |
2,000 |
2,000 |
|
March
31, 2022 |
M1 |
April
01, 2019 |
18,000 (20,000
– 2,000) |
12 |
1,800 |
|
|
|
M2 |
Oct.
01,2022 |
10,000 |
6 |
500 |
2,300 |
|
March
31, 2024 |
M1 |
April
01, 2022 |
16,200 (18,000
– 1,800) |
12 |
1,620 |
|
|
|
M2 |
Oct.
01,2022 |
9,500 |
12 |
950 |
|
|
|
M3 |
April
01, 2022 |
5,000 |
12 |
500 |
3,070 |
II. Balance in Machinery Account as on March 31, 2024 will
be Rs. 27,630
Working Notes:
Preparation of
Machinery Account
|
Machinery
Account |
|||||||||||||
|
Dr. |
Cr. |
||||||||||||
|
Date |
Particulars |
(`) |
Date |
Particulars |
(`) |
||||||||
|
2021 |
|
|
2022 |
|
|
||||||||
|
April
01 |
Bank A/c (M1) |
20,000 |
March
31 |
Depreciation A/c (M1) |
2,000 |
||||||||
|
|
|
|
March
31 |
Balance c/d (M1) |
18,000 |
||||||||
|
|
|
20,000 |
|
|
20,000 |
||||||||
|
2022 |
|
|
2023 |
|
|
||||||||
|
April
01 |
Balance b/d (M1) |
18,000 |
March
31 |
Depreciation A/c |
|
||||||||
|
Oct.
01 |
Bank A/c (M2) |
10,000 |
|
M1(10,000×10×6/100/12) |
*1,800 |
|
|||||||
|
|
|
|
|
M2 |
500 |
2,300 |
|||||||
|
|
|
|
March
31 |
Balance c/d |
|
||||||||
|
|
|
|
|
M1 |
16,200 |
|
|||||||
|
|
|
|
|
M2 |
9,500 |
25,700 |
|||||||
|
|
|
28,000 |
|
|
28,000 |
||||||||
|
2023 |
|
|
2024 |
|
|
||||||||
|
April
01 |
Balance b/d |
|
March
31 |
Depreciation A/c |
|
||||||||
|
|
M1 |
16,200 |
|
|
M1 |
1,620 |
|
||||||
|
|
M2 |
9,500 |
25,700 |
|
M2 |
950 |
|
||||||
|
April
01 |
Bank A/c (M3) |
5,000 |
|
M3 |
500 |
3,070 |
|||||||
|
|
|
|
March
31 |
Balance c/d |
|
||||||||
|
|
|
|
|
M1 |
14,580 |
|
|||||||
|
|
|
|
|
M2 |
8,550 |
|
|||||||
|
|
|
|
|
M3 |
4,500 |
27,630 |
|||||||
|
|
|
30,700 |
|
|
30,700 |
||||||||
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Note: Since
the question does not specify to prepare the Machinery Account, thus, it is
optional to prepare this account.
Question 24:
Gurman & Co. purchased machinery for `40,000 on 1st October, 2021. Depreciation is provided @ 10% p.a. on the Diminishing Balance. On 31st January, 2024, one-fourth of the machinery was found unsuitable and disposed off for `5,600. On the same date new machinery at a cost of `15,000 was purchased. Write up the Machinery account for the years ended 31st March, 2022, 2023 and 2024. Accounts are closed on 31st March each year.
Answer:
|
Machinery
Account |
||||||||||||
|
Dr. |
Cr. |
|||||||||||
|
Date |
Particulars |
J.F. |
(`) |
Date |
Particulars |
J.F. |
(`) |
|||||
|
2021 |
|
|
|
2022 |
|
|
|
|||||
|
Oct. 01 |
Bank |
|
|
Mar.31 |
Depreciation |
|
|
|||||
|
|
I (3/4) |
30,000 |
|
|
|
I (3/4) for 6 months |
1,500 |
|
|
|||
|
|
I(1/4) |
10,000 |
|
40,000 |
|
I (1/4) for 6 months |
500 |
|
2,000 |
|||
|
|
|
|
|
Mar.31 |
Balance c/d |
|
|
|||||
|
|
|
|
|
|
I (3/4) |
28,500 |
|
|
||||
|
|
|
|
|
|
I (1/4) |
9,500 |
|
38,000 |
||||
|
|
|
|
40,000 |
|
|
|
40,000 |
|||||
|
2022 |
|
|
|
2023 |
|
|
|
|||||
|
Apr.01 |
Balance b/d |
|
|
Mar.31 |
Depreciation |
|
|
|||||
|
|
I (3/4) |
28,500 |
|
|
|
I (3/4) |
2,850 |
|
|
|||
|
|
I (1/4) |
9,500 |
|
38,000 |
|
I (1/4) |
950 |
|
3,800 |
|||
|
|
|
|
|
Mar.31 |
Balance c/d |
|
|
|||||
|
|
|
|
|
|
I (3/4) |
25,650 |
|
|
||||
|
|
|
|
|
|
I (1/4) |
8,550 |
|
34,200 |
||||
|
|
|
|
38,000 |
|
|
|
|
38,000 |
||||
|
2023 |
|
|
|
2023 |
|
|
|
|||||
|
Apr.01 |
Balance b/d |
|
|
Jan.31 |
Depreciation I
(1/4)(for 10 Months) |
|
713 |
|||||
|
|
I (3/4) |
25,650 |
|
|
Jan.31 |
Bank I(1/4) |
|
5,600 |
||||
|
2023 |
I (1/4) |
8,550 |
|
34,200 |
|
Profit and Loss
(Loss) |
|
2,237 |
||||
|
Jan.31 |
Bank (II) |
|
15,000 |
2024 Mar.31 |
Depreciation |
|
|
|||||
|
|
|
|
|
|
I (3/4) |
2,565 |
|
|
||||
|
|
|
|
|
|
II (for 2 months) |
250 |
|
2,815 |
||||
|
|
|
|
|
Mar.31 |
Balance c/d |
|
|
|||||
|
|
|
|
|
|
I (3/4) |
23,085 |
|
|
||||
|
|
|
|
|
|
II |
14,750 |
|
37,835 |
||||
|
|
|
|
49,200 |
|
|
|
|
49,200 |
||||
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working
Note
(1)Calculation of Profit or
Loss on Sale of Machine I (1/4):
|
Particulars |
(`) |
|
Book Value of Machine (I)(1/4) on Apr. 01, 2023 |
8,550 |
|
Less: Depreciation for 10
Months |
(713) |
|
Book Value of
Machine (I)(1/4) on Jan. 31 2024 |
7,837 |
|
Less: Sale Value |
(5,600) |
|
Loss on Sale of
Machine I(1/4) |
2,237 |
Click below for more Questions
Ts Grewal Solution 2024-2025
Class 11th