Question 13:
A company whose accounting year is
a financial year, purchased on 1st July, 2021 machinery costing `30,000. It purchased
further machinery on 1st January, 2022 costing
`20,000 and on 1st October, 2022 costing
`10,000. On 1st April, 2023, one-third of the machinery installed on 1st
July, 2021 became obsolete and was sold for
`3,000.
Show how Machinery Account would appear in the books of the company. It being
given that machinery was depreciated by Fixed Installment Method at 10% p.a.
What would be the value of Machinery Account on 1st April, 2024?
Answer:
|
Date |
Particulars |
|
J.F. |
(`) |
Date |
Particulars |
|
J.F. |
(`) |
|
2021 |
|
|
|
|
2022 |
|
|
|
|
|
July 01 |
Bank (I) |
|
|
30,000 |
March
31 |
Depreciation |
|
|
|
|
2021 |
|
|
|
|
|
I (for 9 months) |
2,250 |
|
|
|
Jan. 01 |
Bank (II) |
|
|
20,000 |
|
II |
500 |
|
2,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31 |
Balanced c/d |
|
|
|
|
|
|
|
|
|
|
I |
27,750 |
|
|
|
|
|
|
|
|
|
II |
19,500 |
|
47,250 |
|
|
|
|
|
50,000 |
|
|
|
|
50,000 |
|
2022 |
|
|
|
|
2023 |
|
|
|
|
|
April 01 |
Balance b/d |
|
|
|
March
31 |
Depreciation |
|
|
|
|
|
I |
27,750 |
|
|
|
I |
3,000 |
|
|
|
|
II |
19,500 |
|
47,250 |
|
II |
2,000 |
|
|
|
|
|
|
|
|
|
III |
500 |
|
5,500 |
|
Oct.
01 |
Bank (III) |
|
|
10,000 |
March
31 |
Balance c/d |
|
|
|
|
|
|
|
|
|
|
I |
24,750 |
|
|
|
|
|
|
|
|
|
II |
17,500 |
|
|
|
|
|
|
|
|
|
III |
9,500 |
|
51,750 |
|
|
|
|
|
57,250 |
|
|
|
|
57,250 |
|
2023 |
Balance b/d |
|
|
|
2023 |
|
|
|
|
|
April 01 |
I |
24,750 |
|
|
April
01 |
Bank I(1/3rd
portion) |
|
|
3,000 |
|
|
II |
17,500 |
|
|
April
01 |
Profit and Loss (Loss on Sale of
I) |
|
|
5,250 |
|
|
III |
9,500 |
|
51,750 |
2024 |
|
|
|
|
|
|
|
|
|
|
March
31 |
Depreciation |
|
|
|
|
|
|
|
|
|
|
I (on 2/3rd portion) |
2,000 |
|
|
|
|
|
|
|
|
|
II |
2,000 |
|
|
|
|
|
|
|
|
|
III |
1,000 |
|
5,000 |
|
|
|
|
|
|
March
31 |
Balance c/d |
|
|
|
|
|
|
|
|
|
|
I (on 2/3rd portion) |
14,500 |
|
|
|
|
|
|
|
|
|
II |
15,500 |
|
|
|
|
|
|
|
|
|
III |
8,500 |
|
38,500 |
|
|
|
|
|
51,750 |
|
|
|
|
51,750 |
Working Notes
1. Calculation of Depreciation
Machine 1=30,000×10/100= `3,000
And Drepreciation of 2/3rd proportion=3,000×2/3= `2,000
Machine II =20,000×10/100= `2,000p.a.
Machine III =10,000×10/100= `1,000p.a.
Calculation of profit or loss on sale of 1/3rd Portion of Machine I
|
Particulars |
(`) |
|
Book Value of
1/3rd portion of Machine I on April 01, 2023 (24,750 × 1/3) |
8,250 |
|
Less: Sale Value |
(3,000) |
|
Loss on sale |
5,250 |
Question 14:
On 1st July, 2020, Alpha Ltd. purchases second-hand machinery for `20,000 and spends `3,000 on
reconditioning and installing it. On 1st January, 2021, the firm purchases new
machinery worth `12,000.
On 30th June, 2022, the machinery purchased on 1st January, 2021, was sold for `8,000 and on 1st
July, 2022, a fresh plant was installed.
Payments for this plant was to be made as follows:
|
1st
July, 2022 |
`5,000 |
|
30th
June, 2023 |
`6,000 |
|
30th
June, 2024 |
`5,500 |
Payments
in 2023 and 2024 include interest of `1,000 and `500 respectively.
The company writes off 10% p.a. on the original cost. The accounts are closed
every year on 31st March. Show the Machinery Account for the year ended 31st
March, 2023.
Answer:
Books of Alpha Ltd
Machinery A/c
|
||||||||||
|
Date |
Particulars |
J.F. |
(`) |
Date |
Particulars |
J.F. |
(`) |
|||
|
|
|
|
|
|
2021 |
|
|
|
|
|
|
2020 |
|
|
|
|
Mar.31 |
Depreciation |
|
|
|
|
|
July
01 |
Bank (I) (20,000 + 3,000) |
|
23,000 |
|
I (for 9 months) |
1,725 |
|
|
||
|
2020 |
|
|
|
|
|
II (for 3 months) |
300 |
|
2,025 |
|
|
Jan.01 |
Bank (II) |
|
|
12,000 |
Mar.31 |
Balance c/d |
|
|
|
|
|
|
|
|
|
|
|
I |
21,275 |
|
|
|
|
|
|
|
|
|
|
II |
11,700 |
|
32,975 |
|
|
|
|
|
|
35,000 |
|
|
|
|
35,000 |
|
|
2021 April 01 |
Balance b/d |
|
|
|
2022 |
|
|
|
|
|
|
|
I |
21,275 |
|
|
Mar.31 |
Depreciation |
|
|
|
|
|
|
II |
11,700 |
|
32,975 |
|
I |
2,300 |
|
|
|
|
|
|
|
|
|
|
II |
1,200 |
|
3,500 |
|
|
|
|
|
|
|
Mar.31 |
Balance c/d |
|
|
|
|
|
|
|
|
|
|
|
I |
18,975 |
|
|
|
|
|
|
|
|
|
|
II |
10,500 |
|
29,475 |
|
|
|
|
|
|
32,975 |
|
|
|
|
32,975 |
|
|
2022 |
|
|
|
|
2022 |
|
|
|
|
|
|
April 01 |
Balance b/d |
|
|
|
June 30 |
Bank (II) |
|
|
8,000 |
|
|
|
I |
18,975 |
|
|
June 30 |
Depreciation (II) (for 3 months) |
|
|
300 |
|
|
|
II |
10,500 |
|
29,475 |
June 30 |
Profit and Loss
(Loss) |
|
|
2,200 |
|
|
July
01 |
Bank (III) |
|
|
5,000 |
2023 |
|
|
|
|
|
|
July
01 |
Creditors for
plant (III) |
|
|
10,000 |
Mar.31 |
Depreciation |
|
|
|
|
|
|
|
|
|
|
|
I |
2,300 |
|
|
|
|
|
|
|
|
|
|
III (on 15,000 for 8 months) |
1,125 |
|
3,425 |
|
|
|
|
|
|
|
|
Balance c/d |
|
|
|
|
|
|
|
|
|
|
|
I |
16,675 |
|
|
|
|
|
|
|
|
|
|
III |
13,875 |
|
30,550 |
|
|
|
|
|
|
44,475 |
|
|
|
|
44,475 |
|
Working Notes
1. Calculation of Depreciation
Machine I= 23,000×10/100= `2,300 p.a.
Machine II=12,000×10/100= `1,200 p.a.
Machine III=15,000×10/100= `1,500 p.a.
2. Calculation
of profit on loss on sale of Machine (II)
|
Particulars |
(Rs) |
|
Book Value of
Machine (II) on April 01, 2022 |
10,500 |
|
Less: Depreciation for 3
Months |
(300) |
|
Book Value on
June 30 |
10,200 |
|
Less: Sale |
(8,000) |
|
Loss on Sale |
2,200 |
Question 15:
The following balances appeared
in the books of Priyank Ltd. as on lst April, 2023:
Machinery A/c
|
`10,00,000
|
Provision for Depreciation A/c
|
`4,50,000
|
Depreciation is provided at 10%
per annum on the original cost on 3lst March every year.
On 1st October,
2023, a machine which was purchased on 1st December, 2020 for 1,20,000 was sold
for 34,000.
Prepare
Machinery Account and Provision for Depreciation Account for the year 2023-24.
Answer:
|
Books
of Priyank Ltd. Machinery Account |
|
||||||||||||
|
Dr. |
|
Cr. |
|
||||||||||
|
Date |
Particulars |
J.F. |
(`) |
Date |
Particulars |
J.F. |
(`) |
|
|||||
|
2023 |
|
|
2023 |
|
|
|
|
||||||
|
Apr.01 |
Balance b/d |
|
10,00,000 |
Oct.1st |
Provision for
Depreciation |
|
34,000 |
|
|||||
|
|
|
|
Oct.1st |
Bank |
|
34,000 |
|
||||||
|
|
|
|
Oct.1st |
Profit and Loss |
|
52,000 |
|
||||||
|
|
|
|
2023 |
|
|
|
|||||||
|
|
|
|
Mar.31 |
Balance c/d |
|
8,80,000 |
|
||||||
|
|
|
|
10,00,000 |
|
|
|
10,00,000 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Provision
for Depreciation Account |
|
|||||||||
|
Dr. |
|
Cr. |
|
|||||||
|
Date |
Particulars |
J.F. |
(`) |
Date |
Particulars |
J.F. |
(`) |
|
||
|
2023 |
|
|
|
2023 |
|
|
|
|
||
|
Oct.01 |
Machinery
Account (Accumulated Dep. on Machine Sold) |
|
34,000 |
Apr.01 |
Balance b/d |
|
4,50,000 |
|
||
|
2024 |
Balance c/d |
|
5,10,000 |
Oct.01 |
Deprection A/c |
6,000 |
|
|||
|
(for 6 Months) |
|
|||||||||
|
2024 |
Depreciation (8,80,000 on
@10%) |
|
88,000 |
|
||||||
|
|
|
|
5,44,000 |
|
|
|
5,44,000 |
|
||
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
Working Notes
(1) Calculation of Book Value of Machine Sold on Oct. 01, 2023
|
Particulars |
(`) |
|
Purchased on 1st December, 2020 |
1,20,000 |
|
Less: Accumulate
Depreciation for 4 years till Mar 31, 2022 |
|
|
1.12.2020 to 31.3.2021 ( For
4 Month)= 12,000×4÷12=
`4,000 |
|
|
2021-2022 ` 12,000 |
|
|
2022-2023 ` 12,000 |
|
|
1.4.2023 to 1.10.2023 ( For 6
Month) = 12,000×6÷12=
`6,000 |
34,000 |
|
Book value On 1st October, 2023 |
86,000 |
(2)Calculation of profit or loss on Sale of Machine
|
Particulars |
(`) |
|
Book value On 1st October, 2023 |
86,000 |
|
Less: Sale Value |
(34,000) |
|
Loss on Sale of Machine |
52,000 |
Question 16:
Following balances appear in the books of Hari Bros:
|
|
|
` |
|
1st
April, 2022 |
Machinery
A/c |
80,000 |
|
|
Provision
for Depreciation A/c |
36,000 |
On 1st April, 2022, they decided to sell a machine for
`8,700. This
machine was purchased for `16,000 in April, 2018. Prepare the Provision for
Depreciation Account and Machinery Account on 31st March, 2023, assuming the
firm has been charging Depreciation at 10% p.a. on Straight Line Method.
Answer:
|
Books
of Rama Bros. Machinery
Account |
|||||||||
|
Dr. |
|
Cr. |
|||||||
|
Date |
Particulars |
J.F. |
(`) |
Date |
Particulars |
J.F. |
(`) |
||
|
2022 |
|
|
|
2022 |
|
|
|
||
|
Apr.01 |
Balance b/d
(64,000 + 16,000) |
|
80,000 |
Apr.01 |
Provision for
Depreciation |
|
6,400 |
||
|
|
|
|
|
Apr.01 |
Bank |
|
8,700 |
||
|
|
|
|
|
Apr.01 |
Profit and Loss |
|
900 |
||
|
|
|
|
|
2023 |
|
|
|
||
|
|
|
|
|
Mar.31 |
Balance c/d |
|
64,000 |
||
|
|
|
|
80,000 |
|
|
|
80,000 |
||
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for Depreciation Account |
|||||||||
|
Dr. |
|
Cr. |
|||||||
|
Date |
Particulars |
J.F. |
(`) |
Date |
Particulars |
J.F. |
(`) |
||
|
2022 |
|
|
|
2022 |
|
|
|
||
|
Apr.01 |
Machinery Account (Accumulated
Dep. on Machine Sold) |
|
6,400 |
Apr.01 |
Balance b/d |
|
36,000 |
||
|
2023 |
Balance c/d |
|
36,000 |
2022 |
Depreciation (On 64,000 @10%) |
|
6,400 |
||
|
|
|
|
42,400 |
|
|
|
42,400 |
||
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
Working Notes
(1) Calculation of Book
Value of Machine Sold on April 01, 2022
|
Particulars |
(`) |
|
Machine purchased in 2016 |
16,000 |
|
Less: Accumulate
Depreciation for 4 years till Mar 31, 2022 (1,600 × 4) |
(6,400) |
|
Book value on April 01,
2022 |
9,600 |
(2)Calculation of profit or
loss on Sale of Machine
|
Particulars |
(`) |
|
Book Value on
April 01, 2022 |
9,600 |
|
Less: Sale Value |
(8,700) |
|
Loss on Sale of
Machine |
900 |
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Ts Grewal Solution 2024-2025
Class 11th