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Page No 16.54:
Question 1:
On 1st April, 2015, a limited company purchased a Machine for ₹ 1,90,000 and spent ₹ 10,000 on its installation. At the date of purchase, it was estimated that the scrap value of the machine would be ₹ 50,000 at the end of sixth year.
Give Machine Account and Depreciation A/c in the books of the Company for 4 years after providing depreciation by Fixed Instalment Method. The books are closed on 31st March every year.
Answer:
| Machinery Account | ||||||
| Dr. |
Cr.
|
|||||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) | |
| 2015 | 2016 | |||||
| Apr. 01 | Bank A/c (1,90,000 + 10,000) | 2,00,000 | Mar. 31 | Depreciation A/c | 25,000 | |
| Mar. 31 | Balance c/d | 1,75,000 | ||||
| 2,00,000 | 2,00,000 | |||||
| 2016 | 2017 | |||||
| Apr. 01 | Balance b/d | 1,75,000 | Mar. 31 | Depreciation A/c | 25,000 | |
| Mar. 31 | Balance c/d | 1,50,000 | ||||
| 1,75,000 | 1,75,000 | |||||
| 2017 | 2018 | |||||
| Apr. 01 | Balance b/d | 1,50,000 | Mar. 31 | Depreciation A/c | 25,000 | |
| Mar. 31 | Balance c/d | 1,25,000 | ||||
| 1,50,000 | 1,50,000 | |||||
| 2018 | 2019 | |||||
| Apr. 01 | Balance b/d | 1,25,000 | Mar. 31 | Depreciation A/c | 25,000 | |
| Mar. 31 | Balance c/d | 1,00,000 | ||||
| 1,25,000 | 1,25,000 | |||||
| Depreciation Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) | |
| 2016 | 2016 | |||||
| Mar. 31 | Machinery A/c | 25,000 | Mar. 31 | Profit and Loss A/c | 25,000 | |
| 25,000 | 25,000 | |||||
| 2017 | 2017 | |||||
| Mar. 31 | Machinery A/c | 25,000 | Mar. 31 | Profit and Loss A/c | 25,000 | |
| 25,000 | 25,000 | |||||
| 2018 | 2018 | |||||
| Mar. 31 | Machinery A/c | 25,000 | Mar. 31 | Profit and Loss A/c | 25,000 | |
| 25,000 | 25,000 | |||||
| 2019 | 2019 | |||||
| Mar. 31 | Machinery A/c | 25,000 | Mar. 31 | Profit and Loss A/c | 25,000 | |
| 25,000 | 25,000 | |||||
Working Note: Calculation of Depreciation
Page No 16.55:
Question 2:
On 1st April, 2015, a Company bought Plant and Machinery costing ₹ 68,000. It is estimated that its working life is 10 years, at the end of which it will fetch ₹ 8,000. Additions are made on 1st April, 2016 to the value of ₹ 40,000 (Residual value ₹ 4,000). More additions are made on Oct. 1, 2017 to the value of ₹ 9,800 (Break up value ₹ 800). The working life of both the additional Plant and machinery is 20 years.
Show the Plant and Machinery account for the first four years, if depreciation is written off according to Straight Line Method. The accounts are closed on 31st March every year.
Answer:
| Plant & Machinery Account | ||||||||||||
| Dr. | Cr. | |||||||||||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) | |||||||
| 2015 | 2016 | |||||||||||
| Apr. 01 | Bank A/c (P1) | 68,000 | Mar. 31 | Depreciation A/c | 6,000 | |||||||
| Mar. 31 | Balance c/d | 62,000 | ||||||||||
| 68,000 | 68,000 | |||||||||||
| 2016 | 2017 | |||||||||||
| Apr. 01 | Balance b/d (P1) | 62,000 | Mar. 31 | Depreciation A/c | ||||||||
| Apr. 01 | Bank A/c (P2) | 40,000 |
P1
|
6,000 | ||||||||
|
P2
|
1,800 | 7,800 | ||||||||||
| Mar. 31 | Balance c/d | |||||||||||
|
P1
|
56,000 | |||||||||||
|
P2
|
38,200 | 94,200 | ||||||||||
| 1,02,000 | 1,02,000 | |||||||||||
| 2017 | 2018 | |||||||||||
| Apr. 01 | Balance b/d | Mar. 31 | Depreciation A/c | |||||||||
|
P1
|
56,000 |
P1
|
6,000 | |||||||||
|
P2
|
38,200 | 94,200 |
P2
|
1,800 | ||||||||
| Oct. 01 | Bank A/c (P3) | 9,800 |
P3 (for 6 months)
|
225 | 8,025 | |||||||
| Mar. 31 | Balance c/d | |||||||||||
|
P1
|
50,000 | |||||||||||
|
P2
|
36,400 | |||||||||||
|
P3
|
9,575 | 95,975 | ||||||||||
| 1,04,000 | 1,04,000 | |||||||||||
| 2018 | 2019 | |||||||||||
| Apr. 01 | Balance b/d | Mar. 31 | Depreciation A/c | |||||||||
|
P1
|
50,000 |
P1
|
6,000 | |||||||||
|
P2
|
36,400 |
P2
|
1,800 | |||||||||
|
P3
|
9,575 | 95,975 |
P3
|
450 | 8,250 | |||||||
| Mar. 31 | Balance c/d | |||||||||||
|
P1
|
44,000 | |||||||||||
|
P2
|
34,600 | |||||||||||
|
P3
|
9,125 | 87,725 | ||||||||||
| 95,975 | 95,975 | |||||||||||
Working Note: Calculation of Depreciation
| P1 | P2 | P3 |
|
|
|
Page No 16.55:
Question 3:
Chandra Ltd. purchased a second-hand machine for ₹ 8,000 plus CGST and SGST @ 6% each on 1st July, 2015. They spent ₹ 3,500 on its overhaul and installation.
Depreciation is written off 10% p.a. on the original cost. On 30th September, 2018, the machine was found to be unsuitable and sold for ₹ 6,500. Prepare the Machinery A/c for four years assuming that accounts are closed on 31st March.
Answer:
| Machinery Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) | |
| 2015 | 2016 | |||||
| July 01 | Bank A/c (8,000 + 3,500) | 11,500 | Mar. 31 | Depreciation A/c (for 9 months) | 863 | |
| Balance c/d | 10,637 | |||||
| 11,500 | 11,500 | |||||
| 2016 | 2017 | |||||
| Apr. 01 | Balance b/d | 10,637 | Mar. 31 | Depreciation A/c | 1,150 | |
| Balance c/d | 9,487 | |||||
| 10,637 | 10,637 | |||||
| 2017 | 2018 | |||||
| Apr. 01 | Balance b/d | 9,487 | Mar. 31 | Depreciation A/c | 1,150 | |
| Balance c/d | 8,337 | |||||
| 9,487 | 9,487 | |||||
| 2018 | 2018 | |||||
| Apr. 01 | Balance b/d | 8,337 | Sept. 30 | Depreciation A/c | 575 | |
| Bank A/c (Sale) | 6,500 | |||||
| Profit and Loss A/c (Loss on Sale) | 1,262 | |||||
| 8,337 | 8,337 | |||||
Working Note: Calculation of Profit or Loss on Sale
| Particulars | Amount (₹) |
| Value of Machinery on Apr. 01, 2018 | 8,337 |
|
Less: Depreciation for 6 months
|
575 |
| Value of Machinery on Sept. 30, 2018 | 7,762 |
|
Less: Sale Value
|
6,500 |
| Loss on Sale | 1,262 |
Page No 16.55:
Question 4:
A Ltd. purchased a machine for ₹ 5,00,000 on 1st April, 2012. Further addition were made on 1st October 2012 and on 1st July 2013 for ₹ 4,00,000 and ₹ 3,00,000 respectively. On 1st January, 2015, 1st machine was sold for ₹ 2,85,000 and new machine was purchased for ₹ 6,00,000.
Prepare Machine A/c for three years ending 31st March, 2015 if depreciation is to be charged @ 10% p.a. on straight line basis.
Answer:
|
Machinery Account |
||||||||
|
Dr. |
Cr. |
|||||||
|
Date |
Particulars |
Amount (Rs) |
Date |
Particulars |
Amount (Rs) |
|||
|
2012 |
|
|
2013 |
|
|
|||
|
Apr. 01 |
Bank A/c (M1) |
5,00,000 |
Mar. 31 |
Depreciation A/c (M1) |
50,000 |
|||
|
Oct.01 |
Bank A/c (M2) |
4,00,000 |
|
Depreciation A/c (M2) |
20,000 |
|||
|
|
|
|
Mar. 31 |
Balance c/d |
|
|||
|
|
|
|
|
M1 |
4,50,000 |
|
||
|
|
|
|
|
M2 |
3,80,000 |
8,30,000 |
||
|
|
|
9,00,000 |
|
|
9,00,000 |
|||
|
2013 |
|
|
2014 |
|
|
|||
|
Apr. 01 |
Balance b/d |
|
Mar. 31 |
Depreciation A/c |
|
|||
|
|
M1 |
4,50,000 |
|
|
M1 |
50,000 |
|
|
|
|
M2 |
3,80,000 |
8,30,000 |
|
M2 |
40,000 |
|
|
|
Jul.01 |
Bank A/c (M3) |
3,00,000 |
|
M3 |
22,500 |
1,12,500 |
||
|
|
|
|
Mar. 31 |
Balance c/d |
|
|||
|
|
|
|
|
M1 |
4,00,000 |
|
||
|
|
|
|
|
M2 |
3,40,000 |
|
||
|
|
|
|
|
M3 |
2,77,500 |
10,17,500 |
||
|
|
|
11,30,000 |
|
|
11,30,000 |
|||
|
2014 |
|
|
2015 |
|
|
|||
|
Apr. 01 |
Balance b/d |
|
Jan.01 |
Depreciation A/c (on M1 for 9 months) |
37,500 |
|||
|
|
M1 |
4,00,000 |
|
|
Bank A/c (Sale of M1) |
2,85,000 |
||
|
|
M2 |
3,40,000 |
|
|
Profit and Loss A/c (Loss on Sale) |
77,500 |
||
|
|
M3 |
2,77,500 |
10,17,500 |
Mar. 31 |
Depreciation on- |
|
||
|
2015 |
|
|
|
M2 |
40,000 |
|
||
|
Jan.01 |
Bank A/c (M4) |
6,00,000 |
|
M3 |
30,000 |
|
||
|
|
|
|
|
M4 |
15,000 |
85,000 |
||
|
|
|
|
Mar. 31 |
Balance c/d |
|
|||
|
|
|
|
|
M2 |
3,00,000 |
|
||
|
|
|
|
|
M3 |
2,47,500 |
|
||
|
|
|
|
|
M4 |
5,85,000 |
11,32,500 |
||
|
|
|
16,17,500 |
|
|
16,17,500 |
|||
|
|
|
|
|
|
|
|||
Page No 16.55:
Question 5:
On 1st January, 2016, A Ltd. Purchased a machine for ₹ 2,40,000 and spent ₹ 10,000 on its erection. On 1st July, 2016 an additional machinery costing ₹ 1,00,000 was purchased. On 1st July, 2018 the machine purchased on 1st January, 2016 was sold for ₹ 1,43,000 and on the same date, a new machine was purchased at a cost of ₹ 2,00,000.
Show the Machinery Account for the first three calendar years after charging depreciation at 5% by the Straight Line Method.
Answer:
| Machinery Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) | |||
| 2016 | 2016 | |||||||
| Jan. 01 | Bank A/c (M1) (2,40,000 + 10,000) | 2,50,000 | Dec. 31 | Depreciation A/c | ||||
| 2011 |
M1
|
12,500 | ||||||
| July 01 | Bank A/c (M2) | 1,00,000 |
M2 (for 6 months)
|
2,500 | 15,000 | |||
| Balance c/d | ||||||||
|
M1
|
2,37,500 | |||||||
|
M2
|
97,500 | 3,35,000 | ||||||
| 3,50,000 | 3,50,000 | |||||||
| 2017 | 2017 | |||||||
| Jan. 01 | Balance b/d | Dec. 31 | Depreciation A/c | |||||
|
M1
|
2,37,500 |
M1
|
12,500 | |||||
|
M2
|
97,500 | 3,35,000 |
M2
|
5,000 | 17,500 | |||
| Balance c/d | ||||||||
|
M1
|
2,25,000 | |||||||
|
M2
|
92,500 | 3,17,500 | ||||||
| 3,35,000 | 3,35,000 | |||||||
| 2018 | 2018 | |||||||
| Jan. 01 | Balance b/d | July 01 | Depreciation A/c (M1) | 6,250 | ||||
|
M1
|
2,25,000 | Bank A/c (Sale of M1 ) | 1,43,000 | |||||
|
M2
|
92,500 | 3,17,500 | Profit and Loss A/c (Loss on Sale of M1) | 75,750 | ||||
| July 01 | Bank A/c (M3) | 2,00,000 | Dec. 31 | Depreciation A/c | ||||
|
M2
|
5,000 | |||||||
|
M3 (for 6 months)
|
5,000 | 10,000 | ||||||
| Balance c/d | ||||||||
|
M2
|
87,500 | |||||||
|
M3
|
1,95,000 | 2,82,500 | ||||||
| 5,17,500 | 5,17,500 | |||||||
Working Note: Calculation of Profit or Loss on Sale of M1
| Particulars | Amount |
| Value of Machinery on Jan. 01, 2018 | 2,25,000 |
|
Less: Depreciation for 6 months
|
6,250 |
| Value of Machinery on July 01, 2018 | 28,750 |
|
Less: Sale Value
|
1,43,000 |
| Loss on Sale | 75,750 |
Page No 16.55:
Question 6:
A company purchased on 1st April, 2009, a machinery for ₹ 80,000. On 1st October, 2010, it purchased another machine for ₹ 50,000 and on 1st October, 2011, it sold off the first machine purchased in 2009 for ₹ 23,000. Depreciation was provided on the machinery at the rate of 20% p.a. on the original cost annually.
Give the Machinery Account for four years commencing from 1st April, 2009.
Accounts are closed on 31st March every year.
Answer:
| Machinery Account | |||||||||
| Dr. | Cr. | ||||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | ||||
| 2009 | 2010 | ||||||||
| Apr. 01 | Bank A/c (M1) | 80,000 | Mar. 31 | Depreciation A/c | 16,000 | ||||
| Mar. 31 | Balance c/d | 64,000 | |||||||
| 80,000 | 80,000 | ||||||||
| 2010 | 2011 | ||||||||
| Apr. 01 | Balance b/d | 64,000 | Mar. 31 | Depreciation A/c | |||||
| Oct. 01 | Bank A/c (M2) | 50,000 |
M1
|
16,000 | |||||
|
M2 (for 6 months)
|
5,000 | 21,000 | |||||||
| Mar. 31 | Balance c/d | ||||||||
|
M1
|
48,000 | ||||||||
|
M2
|
45,000 | 93,000 | |||||||
| 1,14,000 | 1,14,000 | ||||||||
| 2011 | 2011 | ||||||||
| Apr. 01 | Balance b/d | Oct. 01 | Depreciation A/c (M1) | 8,000 | |||||
|
M1
|
48,000 | Bank A/c (Sale of M1) | 23,000 | ||||||
|
M2
|
45,000 | 93,000 | Profit and Loss A/c (Loss on Sale of M1) | 17,000 | |||||
| 2012 | |||||||||
| Mar. 31 | Depreciation A/c | 10,000 | |||||||
| Balance c/d | 35,000 | ||||||||
| 93,000 | 93,000 | ||||||||
| 2012 | 2013 | ||||||||
| Apr. 01 | Balance b/d | 35,000 | Mar. 31 | Depreciation A/c | 10,000 | ||||
| Mar. 31 | Balance c/d | 25,000 | |||||||
| 35,000 | 35,000 | ||||||||
Working Note: Calculation of Profit or Loss on Sale of M1
| Particulars | Amount |
| Value of Machinery on Apr. 01, 2011 | 48,000 |
|
Less: Depreciation for 6 months
|
8,000 |
| Value of Machinery on Oct. 01, 2011 | 40,000 |
|
Less: Sale Value
|
23,000 |
| Loss on Sale | 17,000 |
Page No 16.56:
Question 7:
Bhushan & Company purchased a Machinery on 1st April, 2015, for ₹ 54,000 and spent ₹ 6,000 on its installation. On 1st December, 2016, it purchased another machine for ₹ 30,000.
On 30th June 2017, the first machine purchased on 1st April, 2015, is sold for ₹ 36,000 and on the same date it purchased a new machinery for ₹ 80,000.
On December 1, 2018, the second machine (purchased on December 1, 2016) was also sold off for ₹ 26,000.
Depreciation was provided on machinery @ 10% p.a. on Original Cost Method annually on 31st March. Give the machinery account for four years.
Answer:
| Machinery Account | |||||||||
| Dr. | Cr. | ||||||||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) | ||||
| 2015 | 2016 | ||||||||
| Apr. 01 | Bank A/c (M1) (54,000 + 6,000) | 60,000 | Mar. 31 | Depreciation A/c | 6,000 | ||||
| Mar. 31 | Balance c/d | 54,000 | |||||||
| 60,000 | 60,000 | ||||||||
| 2016 | 2017 | ||||||||
| Apr. 01 | Balance b/d | 54,000 | Mar. 31 | Depreciation A/c | |||||
| Dec. 01 | Bank A/c (M2) | 30,000 |
M1
|
6,000 | |||||
|
M2 (for 4 months)
|
1,000 | 7,000 | |||||||
| Mar. 31 | Balance c/d | ||||||||
|
M1
|
48,000 | ||||||||
|
M2
|
29,000 | 77,000 | |||||||
| 84,000 | 84,000 | ||||||||
| 2017 | 2017 | ||||||||
| Apr. 01 | Balance b/d | June 30 | Depreciation A/c (M1) | 1,500 | |||||
|
M1
|
48,000 | Bank A/c (Sale of M1) | 36,000 | ||||||
|
M2
|
29,000 | 77,000 | Profit and Loss A/c (Loss on Sale of M1) | 10,500 | |||||
| June 30 | Bank A/c (M3) | 80,000 | 2018 | ||||||
| Mar. 31 | Depreciation A/c | ||||||||
|
M2
|
3,000 | ||||||||
|
M3 (for 9 months)
|
6,000 | 9,000 | |||||||
| Balance c/d | |||||||||
|
M2
|
26,000 | ||||||||
|
M3
|
74,000 | 1,00,000 | |||||||
| 1,57,000 | 1,57,000 | ||||||||
| 2018 | 2018 | ||||||||
| Apr. 01 | Bank A/c | Dec. 01 | Depreciation A/c (M2) | 2,000 | |||||
|
M2
|
26,000 | Bank A/c (Sale of M2) | 26,000 | ||||||
|
M3
|
74,000 | 1,00,000 | 2019 | ||||||
| Dec. 01 | Profit and Loss A/c (Profit on sale of M2) | 2,000 | Mar. 31 | Depreciation A/c (M3) | 8,000 | ||||
| Balance c/d | 66,000 | ||||||||
| 1,02,000 | 1,02,000 | ||||||||
Working Notes:
WN1: Calculation of Profit or Loss on Sale on M1
| Particulars | Amount |
| Value of Machinery on Apr. 01, 2017 | 48,000 |
|
Less: Depreciation for 3 months
|
1,500 |
| Value of Machinery on June 30, 2017 | 46,500 |
|
Less: Sale Value
|
36,000 |
| Loss on Sale | 10,500 |
WN2: Calculation of Profit or Loss on Sale of M2
| Particulars | Amount |
| Value of Machinery on Apr. 01, 2018 | 26,000 |
|
Less: Depreciation for 8 months
|
2,000 |
| Value of Machinery on Dec. 01, 2018 | 24,000 |
|
Less: Sale Value
|
26,000 |
| Profit on Sale | 2,000 |
Page No 16.56:
Question 8:
On 1st October, 2009, Raj & Co. purchased machinery worth ₹ 40,000. On 1st October, 2011, it buys additional machinery worth ₹ 10,000. On 30th September, 2012, half of the machinery purchased on 1st Oct., 2009, is sold for ₹ 8,200. The company writes off 10 per cent p.a. on the original cost. The accounts are closed every year on 31st March.
Show the Machinery Account for four years.
Answer:
| Machinery Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |||
| 2009 | 2010 | |||||||
| Oct. 01 | Bank A/c | Mar. 31 | Depreciation A/c | |||||
|
M1
|
20,000 |
M1 (for 6 months)
|
1,000 | |||||
|
M2
|
20,000 | 40,000 |
M2 (for 6 months)
|
1,000 | 2,000 | |||
| Balance c/d | ||||||||
|
M1
|
19,000 | |||||||
|
M2
|
19,000 | 38,000 | ||||||
| 40,000 | 40,000 | |||||||
| 2010 | 2011 | |||||||
| Apr. 01 | Balance b/d | Mar. 31 | Depreciation A/c | |||||
|
M1
|
19,000 |
M1
|
2,000 | |||||
|
M2
|
19,000 | 38,000 |
M2
|
2,000 | 4,000 | |||
| Balance c/d | ||||||||
|
M1
|
17,000 | |||||||
|
M2
|
17,000 | 34,000 | ||||||
| 38,000 | 38,000 | |||||||
| 2011 | 2012 | |||||||
| Apr. 01 | Balance b/d | Mar. 31 | Depreciation A/c | |||||
|
M1
|
17,000 |
M1
|
2,000 | |||||
|
M2
|
17,000 | 34,000 |
M2
|
2,000 | ||||
| Oct. 01 | Bank A/c (M3) | 10,000 |
M3 (for 6 months)
|
500 | 4,500 | |||
| Mar. 31 | Balance c/d | |||||||
|
M1
|
15,000 | |||||||
|
M2
|
15,000 | |||||||
|
M3
|
9,500 | 39,500 | ||||||
| 44,000 | 44,000 | |||||||
| 2012 | 2012 | |||||||
| Apr. 01 | Balance b/d | Sept. 30 | Depreciation A/c (M1) | 1,000 | ||||
|
M1
|
15,000 | Bank A/c (Sale of M1) | 8,200 | |||||
|
M2
|
15,000 | Profit and Loss A/c (Loss on Sale of M1) | 5,800 | |||||
|
M3
|
9,500 | 39,500 | 2013 | |||||
| Mar.31 | Depreciation A/c | |||||||
|
M2
|
2,000 | |||||||
|
M3
|
1,000 | 3,000 | ||||||
| Balance c/d | ||||||||
|
M2
|
13,000 | |||||||
|
M3
|
8,500 | 21,500 | ||||||
| 39,500 | 39,500 | |||||||
Working Note: Calculation of Profit or Loss on Sale of M1
| Particulars | Amount |
| Value of Machinery on Apr. 01, 2012 | 15,000 |
|
Less: Depreciation for 6 months
|
1,000 |
| Value of Machinery Sept. 30, 2012 | 14,000 |
|
Less: Sale Value
|
8,200 |
| Loss on Sale | 5,800 |
Note: In order to make easy calculation machinery purchased on October 01, 2009 has been divided into two parts i.e. M1 and M2
Thus, M1 represents the first part i.e. sold for Rs 8,200
M2 represents the second part, which remains in the business
Page No 16.56:
Question 9:
On 1st April, 2010, Plant and Machinery was purchased for ₹ 1,20,000. New machinery was purchased on 1st Oct., 2010, for ₹ 50,000 and on 1st July, 2011, for ₹ 25,000.
On 1st January, 2013, a machinery of the original value of ₹ 20,000 which was included in the machinery purchased on 1st April, 2010, was sold for ₹ 6,000. Prepare Plant & Machinery A/c for three years after providing depreciation at 10% p.a. on Straight Line Method. Accounts are closed on 31st March every year.
Answer:
| Plant & Machinery Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |||
| 2010 | 2011 | |||||||
| Apr. 01 | Bank A/c | Mar. 31 | Depreciation A/c | |||||
|
M1
|
20,000 |
M1
|
2,000 | |||||
|
M2
|
1,00,000 | 1,20,000 |
M2
|
10,000 | ||||
| Oct. 01 | Bank A/c (M3) | 50,000 |
M3 (for 6 months)
|
2,500 | 14,500 | |||
| Mar. 31 | Balance c/d | |||||||
|
M1
|
18,000 | |||||||
|
M2
|
90,000 | |||||||
|
M3
|
47,500 | 1,55,500 | ||||||
| 1,70,000 | 1,70,000 | |||||||
| 2011 | 2012 | |||||||
| Apr. 01 | Balance b/d | Mar. 31 | Depreciation A/c | |||||
|
M1
|
18,000 |
M1
|
2,000 | |||||
|
M2
|
90,000 |
M2
|
10,000 | |||||
|
M3
|
47,500 | 1,55,500 |
M3
|
5,000 | ||||
| July 01 | Bank A/c (M4) | 25,000 |
M4 (for 9 months)
|
1,875 | 18,875 | |||
| Mar. 31 | Balance c/d | |||||||
|
M1
|
16,000 | |||||||
|
M2
|
80,000 | |||||||
|
M3
|
42,500 | |||||||
|
M4
|
23,125 | 1,61,625 | ||||||
| 1,80,500 | 1,80,500 | |||||||
| 2012 | 2013 | |||||||
| Apr.01 | Balance b/d | Jan. 01 | Depreciation A/c (M1) | 1,500 | ||||
|
M1
|
16,000 | Bank A/c (Sale of M1) | 6,000 | |||||
|
M2
|
80,000 | Profit and Loss A/c (Loss on Sale of M1) | 8,500 | |||||
|
M3
|
42,500 | Mar. 31 | Depreciation A/c | |||||
|
M4
|
23,125 | 1,61,625 |
M2
|
10,000 | ||||
|
M3
|
5,000 | |||||||
|
M4
|
2,500 | 17,500 | ||||||
| Mar. 31 | Balance c/d | |||||||
|
M2
|
70,000 | |||||||
|
M3
|
37,500 | |||||||
|
M4
|
20,625 | 1,28,125 | ||||||
| 1,61,625 | 1,61,625 | |||||||
Working Note: Calculation of Profit or Loss on Sale of M1
| Particulars | Amount |
| Value of Machinery on Apr. 01, 2012 | 16,000 |
|
Less: Depreciation for 9 months
|
1,500 |
| Value of Machinery on Jan.01, 2013 | 14,500 |
|
Less: Sale Value
|
6,000 |
| Loss on Sale | 8,500 |
Note: In order to make easy calculation plant and machinery purchased on April 01, 2010 has been divided into two parts i.e. M1 and M2.
Thus, M1: Rs 20,000 (sold for Rs 6,000)
Page No 16.56:
Question 10:
From the following transactions of a concern, prepare Machinery Account for the year ending 31st March, 2013 :-
| 2012 | ||
| April 1 | : | Purchased a second-hand machinery for ₹ 40,000. |
| April 1 | : | Spent ₹ 10,000 on repairs for making it serviceable. |
| Sept. 30 | : | Purchased additional new machinery for ₹ 20,000. |
| Dec. 31 | : | Repairs and renewals of machinery ₹ 2,000. |
| 2013 | ||
| March 31 | : | Depreciate the machinery at 10% p.a. |
Answer:
| Machinery Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |||
| 2012 | 2013 | |||||||
| Apr. 01 | Bank A/c (M1) (40,000 + 10,000) | 50,000 | Mar. 31 | Depreciation A/c | ||||
| Sept.30 | Bank A/c (M2) | 20,000 |
M1
|
5,000 | ||||
|
M2 (for 6 months)
|
1,000 | 6,000 | ||||||
| Balance c/d | ||||||||
|
M1
|
45,000 | |||||||
|
M2
|
19,000 | 64,000 | ||||||
| 70,000 | 70,000 | |||||||
Note: Repair charges of Rs 2,000 are categorised under revenue expenditure because these are incurred on December 31, 2012 but machinery has been purchased on September 30, 2012.
Page No 16.57:
Question 11:
A plant is purchased for ₹ 60,000 on 1st April, 2009. It is estimated that the residual value of this plant at the end of its working life of 10 years will be ₹ 20,920. Depreciation is to be provided at 10% p.a. on diminishing balance method.
You are required to show the Plant Account for 4 years, assuming that the books are closed on 31st March every year.
Answer:
| Plant Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |
| 2009 | 2010 | |||||
| Apr. 01 | Bank A/c | 60,000 | Mar. 31 | Depreciation A/c | 6,000 | |
| Mar. 31 | Balance c/d | 54,000 | ||||
| 60,000 | 60,000 | |||||
| 2010 | 2011 | |||||
| Apr. 01 | Balance b/d | 54,000 | Mar. 31 | Depreciation A/c | 5,400 | |
| Mar. 31 | Balance c/d | 48,600 | ||||
| 54,000 | 54,000 | |||||
| 2011 | 2012 | |||||
| Apr. 01 | Balance b/d | 48,600 | Mar. 31 | Depreciation A/c | 4,860 | |
| Mar. 31 | Balance c/d | 43,740 | ||||
| 48,600 | 48,600 | |||||
| 2012 | 2013 | |||||
| Apr. 01 | Balance b/d | 43,740 | Mar. 31 | Depreciation A/c | 4,374 | |
| Mar. 31 | Balance c/d | 39,366 | ||||
| 43,740 | 43,740 | |||||
Note: When deprecation is charged as per written down value method, scrap value of asset is ignored.
Page No 16.57:
Question 12:
A Company purchased a second-hand machine on 1st April, 2016, for ₹ 30,000 and immediately spent ₹ 4,000 on its repair and ₹ 1,000 on its installation. On Oct. 1, 2018, the machine was sold for ₹ 25,000. Prepare Machine Account after charging depreciation @ 10% p.a. by diminishing balance method, assuming that the books are closed on 31st March every year. IGST was charged @ 12% on purchase and sale of machine.
Answer:
| Machinery Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) | |
| 2016 | 2017 | |||||
| Apr. 01 | Bank A/c (30,000 +4,000 + 1,000) | 35,000 | Mar. 31 | Depreciation A/c | 3,500 | |
| Balance c/d | 31,500 | |||||
| 35,000 | 35,000 | |||||
| 2017 | 2018 | |||||
| Apr. 01 | Balance b/d | 31,500 | Mar. 31 | Depreciation A/c | 3,150 | |
| Mar. 31 | Balance c/d | 28,350 | ||||
| 31,500 | 31,500 | |||||
| 2018 | 2018 | |||||
| Apr. 01 | Balance b/d | 28,350 | Oct. 01 | Depreciation A/c | 1,418 | |
| Bank A/c (Sale) | 25,000 | |||||
| Profit and Loss A/c (Loss on Sale) | 1,932 | |||||
| 28,350 | 28,350 | |||||
Working Note: Calculation of Profit or Loss on Sale
| Particulars | Amount (₹) |
| Value of Machinery on Apr. 01, 2018 | 28,350 |
|
Less: Depreciation for 6 months
|
1,418 |
| Value of Machinery on Oct. 01, 2018 | 26,932 |
|
Less: Sale Value
|
25,000 |
| Loss on Sale | 1,932 |
Page No 16.57:
Question 13:
A firm purchased on 1st April, 2009, a second-hand Machinery for ₹ 36,000 and spent ₹ 4,000 on its installation. On 1st Oct. in the same year another Machinery costing ₹ 20,000 was purchased. On 1st Oct., 2011, the Machinery bought on 1st April, 2009 was sold off for ₹ 12,000 and on the same date a fresh Machine was purchased for ₹ 64,000. Depreciation is provided annually on 31st March, @ 10% p.a. on the Written Down Value Method. Show the Machine A/c from 1st April, 2009 to 31st March, 2013.
Answer:
| Machinery Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |||
| 2009 | 2010 | |||||||
| Apr. 01 | Bank A/c (M1) (36,000 + 4,000) | 40,000 | Mar. 31 | Depreciation A/c | ||||
| Oct. 01 | Bank A/c (M2) | 20,000 |
M1
|
4,000 | ||||
|
M2 (for 6 months)
|
1,000 | 5,000 | ||||||
| Mar. 31 | Balance c/d | |||||||
|
M1
|
36,000 | |||||||
|
M2
|
19,000 | 55,000 | ||||||
| 60,000 | 60,000 | |||||||
| 2010 | 2011 | |||||||
| Apr. 01 | Balance b/d | Mar. 31 | Depreciation A/c | |||||
|
M1
|
36,000 |
M1
|
3,600 | |||||
|
M2
|
19,000 | 55,000 |
M2
|
1,900 | 5,500 | |||
| Mar. 31 | Balance c/d | |||||||
|
M1
|
32,400 | |||||||
|
M2
|
17,100 | 49,500 | ||||||
| 55,000 | 55,000 | |||||||
| 2011 | 2011 | |||||||
| Apr. 01 | Balance b/d | Oct. 01 | Depreciation A/c (M1) | 1,620 | ||||
|
M1
|
32,400 | Bank A/c (Sale of M1) | 12,000 | |||||
|
M2
|
17,100 | 49,500 | Profit and Loss A/c (Loss on Sale of M1) | 18,780 | ||||
| Oct. 01 | Bank A/c (M3) | 64,000 | 2012 | |||||
| Mar. 31 | Depreciation A/c | |||||||
|
M2
|
1,710 | |||||||
|
M3 (for 6 months)
|
3,200 | 4,910 | ||||||
| Mar. 31 | Balance c/d | |||||||
|
M2
|
15,390 | |||||||
|
M3
|
60,800 | 76,190 | ||||||
| 1,13,500 | 1,13,500 | |||||||
| 2012 | 2013 | |||||||
| Apr. 01 | Balance b/d | Mar. 31 | Depreciation A/c | |||||
|
M2
|
15,390 |
M2
|
1,539 | |||||
|
M3
|
60,800 | 76,190 |
M3
|
6,080 | 7,619 | |||
| Mar. 31 | Balance c/d | |||||||
|
M2
|
13,851 | |||||||
|
M3
|
54,720 | 68,571 | ||||||
| 76,190 | 76,190 | |||||||
Working Note: Calculation of Profit or Loss on Sale
| Particulars | Amount |
| Value of Machinery on Apr. 01, 2011 | 32,400 |
|
Less: Depreciation for 6 months
|
1,620 |
| Value of Machinery on Oct. 01, 2011 | 30,780 |
|
Less: Sale Value
|
12,000 |
| Loss on Sale | 18,780 |
Page No 16.57:
Question 14:
A Company purchased a machinery for ₹ 50,000 on 1st Oct., 2016. Another machinery costing ₹ 10,000 was purchased on 1st Dec., 2017. On 31st March, 2019, the machinery purchased in 2016 was sold at a loss of ₹ 5,000. The Company charges depreciation at the rate of 15% p.a. on Diminishing Balance Method. Accounts are closed on 31st March every year.
Prepare Machinery account for 3 years.
Answer:
| Machinery Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) | |||
| 2016 | 2017 | |||||||
| Oct. 01 | Bank A/c (M1) | 50,000 | Mar. 31 | Depreciation A/c (for 6 months) | 3,750 | |||
| Mar. 31 | Balance c/d | 46,250 | ||||||
| 50,000 | 50,000 | |||||||
| 2017 | 2018 | |||||||
| Apr. 01 | Balance b/d | 46,250 | Mar. 31 | Depreciation A/c | ||||
| Dec. 01 | Bank A/c (M2) | 10,000 |
M1
|
6,938 | ||||
|
M2 (for 4 months)
|
500 | 7,438 | ||||||
| Mar. 31 | Balance c/d | |||||||
|
M1
|
39,312 | |||||||
|
M2
|
9,500 | 48,812 | ||||||
| 56,250 | 56,250 | |||||||
| 2018 | 2019 | |||||||
| Apr. 01 | Balance b/d | Mar. 31 | Depreciation A/c | 5,897 | ||||
|
M1
|
39,312 | Bank A/c (Sale of M1) | 28,415 | |||||
|
M2
|
9,500 | 48,812 | Profit and Loss A/c (Loss on Sale of M1) | 5,000 | ||||
| Mar. 31 | Depreciation A/c (M2) | 1,425 | ||||||
| Mar. 31 | Balance c/d | 8,075 | ||||||
| 48,812 | 48,812 | |||||||
Working Note: Calculation of Sale Price of M1
| Particulars | Amount |
| Value of Machinery on Apr. 01, 2018 | 39,312 |
|
Less: Depreciation for 12 months
|
5,897 |
| Value of Machinery on Mar. 31, 2019 | 33,415 |
|
Less: Loss on Sale (given)
|
5,000 |
| Sale Value (Balancing Figure) | 28,415 |
Page No 16.57:
Question 15:
Ashoka Ltd. bought a machine on 1st April, 2010 for ₹ 2,40,000 and spent ₹ 4,000 on its carriage and ₹ 6,000 towards installation cost. On 1st July, 2011 it purchased a second hand machinery for ₹ 75,000 and spent ₹ 25,000 on its overhauling.
On 1st January, 2013 it decided to sell the machinery bought on 1st April, 2010 at a loss of ₹ 20,000. It bought another machine on the same date for ₹ 40,000. Company decided to charge depreciation @ 15% p.a. on written down value method. Prepare machinery account for 3 years. Books are closed each year on 31st March.
Answer:
| Machinery Account | |||||||||
| Dr. | Cr. | ||||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | ||||
| 2010 | 2011 | ||||||||
| Apr. 01 | Bank A/c (M1) (2,40,000 + 4,000 + 6,000) |
2,50,000 | Mar. 31 | Depreciation A/c | 37,500 | ||||
| Mar. 31 | Balance c/d | 2,12,500 | |||||||
| 2,50,000 | 2,50,000 | ||||||||
| 2011 | 2012 | ||||||||
| Apr. 01 | Balance b/d | 2,12,500 | Mar. 31 | Depreciation A/c | |||||
| July 01 | Bank A/c (M2) (75,000+25,000) | 1,00,000 |
M1
|
31,875 | |||||
|
M2 (for 9 months)
|
11,250 | 43,125 | |||||||
| Mar. 31 | Balance c/d | ||||||||
|
M1
|
1,80,625 | ||||||||
|
M2
|
88,750 | 2,69,375 | |||||||
| 3,12,500 | 3,12,500 | ||||||||
| 2012 | 2013 | ||||||||
| Apr. 01 | Balance b/d | Jan. 01 | Depreciation A/c (M1) | 20,320 | |||||
|
M1
|
1,80,625 | Bank A/c (Sale of M1) | 1,40,305 | ||||||
|
M2
|
88,750 | 2,69,375 | Profit and Loss A/c (Loss on Sale of M1) | 20,000 | |||||
| 2013 | Mar. 31 | Depreciation A/c | |||||||
| Jan. 01 | Bank A/c (M3) | 40,000 |
M2
|
13,312 | |||||
|
M3 (for 3 months)
|
1,500 | 14,813 | |||||||
| Mar. 31 | Balance c/d | ||||||||
|
M2
|
75,438 | ||||||||
|
M3
|
38,500 | 1,13,938 | |||||||
| 3,09,375 | 3,09,375 | ||||||||
Working Note: Calculation of Sale Price of M1
| Particulars | Amount |
| Value of Machinery on Apr. 01, 2012 | 1,80,625 |
|
Less: Depreciation for 9 months
|
20,320 |
| Value of Machinery on Jan. 01, 2013 | 1,60,305 |
|
Less: Loss on Sale (given)
|
20,000 |
| Sale Value (Balancing Figure) | 1,40,305 |
Page No 16.58:
Question 16:
The Sameer Transport Company purchased 10 Trucks at ₹ 90,000 each on 1st April 2011. On 1st October 2013 one of the Trucks was involved in an accident and is completely destroyed. ₹ 56,200 was received from the Insurance company in full settlement. On the same date another truck was purchased by the company for the sum of ₹ 1,00,000. The company writes off 20% per annum on the Diminishing Balance Method. The company maintains the calendar year as its financial year. Show the Truck Account for four years ending 31st December, 2014.
Answer:
| Truck Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |||
| 2011 | 2011 | |||||||
| Apr. 01 | Bank A/c | Dec. 31 | Depreciation A/c | |||||
| T1 | 90,000 |
T1 (for 9 months)
|
13,500 | |||||
| T2 | 8,10,000 | 9,00,000 |
T2 (for 9 months)
|
1,21,500 | 1,35,000 | |||
| Dec. 31 | Balance c/d | |||||||
|
T1
|
76,500 | |||||||
|
T2
|
6,88,500 | 7,65,000 | ||||||
| 9,00,000 | 9,00,000 | |||||||
| 2012 | 2012 | |||||||
| Jan. 01 | Balance b/d | Dec. 31 | Depreciation A/c | |||||
| T1 | 76,500 |
T1
|
15,300 | |||||
| T2 | 6,88,500 | 7,65,000 |
T2
|
1,37,700 | 1,53,000 | |||
| Dec. 31 | Balance c/d | |||||||
|
T1
|
61,200 | |||||||
|
T2
|
5,50,800 | 6,12,000 | ||||||
| 7,65,000 | 7,65,000 | |||||||
| 2013 | 2013 | |||||||
| Jan. 01 | Balance b/d | Oct. 01 | Depreciation A/c (T1) | 9,180 | ||||
| T1 | 61,200 | Oct. 01 | Bank A/c (Sale of T1) | 56,200 | ||||
| T2 | 5,50,800 | 6,12,000 | Dec. 31 | Depreciation A/c | ||||
| Oct. 01 | Profit and Loss A/c (Profit on Sale of T1) | 4,180 |
T2
|
1,10,160 | ||||
| Oct. 01 | Bank A/c (T3) | 1,00,000 |
T3 (for 6 months)
|
5,000 | 1,15,160 | |||
| Dec. 31 | Balance c/d | |||||||
|
T2
|
4,40,640 | |||||||
|
T3
|
95,000 | 5,35,640 | ||||||
| 7,16,180 | 7,16,180 | |||||||
| 2014 | 2014 | |||||||
| Jan. 01 | Balance b/d | Dec. 31 | Depreciation A/c | |||||
| T2 | 4,40,640 |
T2
|
88,128 | |||||
| T3 | 95,000 | 5,35,640 |
T3
|
19,000 | 1,07,128 | |||
| Dec. 31 | Balance c/d | |||||||
|
T2
|
3,52,512 | |||||||
|
T3
|
76,000 | 4,28,512 | ||||||
| 5,35,640 | 5,35,640 | |||||||
Working Note: Calculation of Profit & Loss on Sale of T1
| Particulars | Amount |
| Value of Truck on Jan. 01, 2013 | 61,200 |
|
Less: Depreciation for 9 months
|
9,180 |
| Value of Truck on Oct. 01, 2013 | 52,020 |
|
Less: Sale Value
|
56,200 |
| Profit on Sale | 4,180 |
Note: In order to make easy calculation, Truck purchased on April 01, 2011 has been divided into two parts i.e. T1 and T2.
Thus, T1: Rs 90,000 (sold for Rs 56,200)
Page No 16.58:
Question 17:
Raja Textiles Co. which closes its books on 31st March, purchased a machine on 1-4-2009 for ₹ 50,000. On 1-10-2010, it purchased an additional machine for ₹ 30,000. The part of the machine which was purchased on 1-4-2009 costing ₹ 10,000 was sold for ₹ 3,600 on 30th Sept., 2012. Prepare the Machine Account for four years, if the depreciation is provided at the rate of 10% p.a. on Diminishing Balance Method.
Answer:
| Machinery Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |||
| 2009 | 2010 | |||||||
| Apr. 01 | Bank A/c | Mar. 31 | Depreciation A/c | |||||
|
M1
|
10,000 |
M1
|
1,000 | |||||
|
M2
|
40,000 | 50,000 |
M2
|
4,000 | 5,000 | |||
| Mar. 31 | Balance c/d | |||||||
|
M1
|
9,000 | |||||||
|
M2
|
36,000 | 45,000 | ||||||
| 50,000 | 50,000 | |||||||
| 2010 | 2011 | |||||||
| Apr. 01 | Balance b/d | Mar. 31 | Depreciation A/c | |||||
|
M1
|
9,000 |
M1
|
900 | |||||
|
M2
|
36,000 | 45,000 |
M2
|
3,600 | ||||
| Oct. 01 | Bank A/c (M3) | 30,000 |
M3 (for 6 months)
|
1,500 | 6,000 | |||
| Mar. 31 | Balance c/d | |||||||
|
M1
|
8,100 | |||||||
|
M2
|
32,400 | |||||||
|
M3
|
28,500 | 69,000 | ||||||
| 75,000 | 75,000 | |||||||
| 2011 | 2012 | |||||||
| Apr. 01 | Balance b/d | Mar. 31 | Depreciation A/c | |||||
|
M1
|
8,100 |
M1
|
810 | |||||
|
M2
|
32,400 |
M2
|
3,240 | |||||
|
M3
|
28,500 | 69,000 |
M3
|
2,850 | 6,900 | |||
| Mar. 31 | Balance c/d | |||||||
|
M1
|
7,290 | |||||||
|
M2
|
29,160 | |||||||
|
M3
|
25,650 | 62,100 | ||||||
| 69,000 | 69,000 | |||||||
| 2012 | 2012 | |||||||
| Apr. 01 | Balance b/d | Sept. 30 | Depreciation A/c (M1) | 365 | ||||
|
M1
|
7,290 | Sept. 30 | Bank A/c (sale of M1) | 3,600 | ||||
|
M2
|
29,160 | Sept. 30 | Profit and Loss A/c (Loss on Sale of M1) | 3,325 | ||||
|
M3
|
25,650 | 62,100 | 2013 | |||||
| Mar. 31 | Depreciation A/c | |||||||
|
M2
|
2,916 | |||||||
|
M3
|
2,565 | 5,481 | ||||||
| Mar. 31 | Balance c/d | |||||||
|
M2
|
26,244 | |||||||
|
M3
|
23,085 | 49,329 | ||||||
| 62,100 | 62,100 | |||||||
Working Note: Calculation of Profit & Loss Sale of M1
| Particulars | Amount |
| Value of Machinery on Apr. 01, 2012 | 7,290 |
|
Less: Depreciation for 6 months
|
365 |
| Value of Machinery on Sept.30, 2012 | 6,925 |
|
Less: Sale Value
|
3,600 |
| Loss on Sale | 3,325 |
Note: In order to make easy calculation, machinery purchased on April 01, 2009 has been divided into two parts i.e. M1 and M2.
Thus, M1: Rs 10,000 (sold for Rs 3,600)
M2: Rs 40,000
Page No 16.58:
Question 18:
A Company, which closes its books on 31st March every year, purchased on 1st July, 2010, machinery costing ₹ 30,000. It purchased further machinery on 1st January, 2011, costing ₹ 20,000 and on 1st October, 2011, costing ₹ 10,000. On 1st April, 2012, one-third of the machinery installed on 1st July, 2010, became obsolete and was sold for ₹ 3,000.
Show how the machinery account would appear in the books of the Company, it being given that machinery was depreciated by Diminishing Balance Method at 10% per annum. What would be the balance of Machinery Account on 1st April, 2013?
Answer:
| Machinery Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |||
| 2010 | 2011 | |||||||
| July 01 | Bank A/c | Mar. 31 | Depreciation A/c | |||||
|
M1
|
10,000 |
M1 (for 9 months)
|
750 | |||||
|
M2
|
20,000 | 30,000 |
M2 (for 9 months)
|
1,500 | ||||
| 2011 |
M3 (for 3 months)
|
500 | 2,750 | |||||
| Jan. 01 | Bank A/c (M3) | 20,000 | Mar. 31 | Balance c/d | ||||
|
M1
|
9,250 | |||||||
|
M2
|
18,500 | |||||||
|
M3
|
19,500 | 47,250 | ||||||
| 50,000 | 50,000 | |||||||
| 2011 | 2012 | |||||||
| Apr. 01 | Balance b/d | Mar. 31 | Depreciation A/c | |||||
|
M1
|
9,250 |
M1
|
925 | |||||
|
M2
|
18,500 |
M2
|
1,850 | |||||
|
M3
|
19,500 | 47,250 |
M3
|
1,950 | ||||
| Oct. 01 | Bank A/c (M4) | 10,000 |
M4 (for 6 months)
|
500 | 5,225 | |||
| Mar. 31 | Balance c/d | |||||||
|
M1
|
8,325 | |||||||
|
M2
|
16,650 | |||||||
|
M3
|
17,550 | |||||||
|
M4
|
9,500 | 52,025 | ||||||
| 57,250 | 57,250 | |||||||
| 2012 | 2012 | |||||||
| Apr. 01 | Balance b/d | Apr. 01 | Bank A/c (Sale of M1) | 3,000 | ||||
|
M1
|
8,325 | Profit and Loss A/c (Loss on Sale of M1) | 5,325 | |||||
|
M2
|
16,650 | 2013 | ||||||
|
M3
|
17,550 | Mar. 31 | Depreciation A/c | |||||
|
M4
|
9,500 | 52,025 |
M2
|
1,665 | ||||
|
M3
|
1,755 | |||||||
|
M4
|
950 | 4,370 | ||||||
| Mar. 31 | Balance c/d | |||||||
|
M2
|
14,985 | |||||||
|
M3
|
15,795 | |||||||
|
M4
|
8,550 | 39,330 | ||||||
| 52,025 | 52,025 | |||||||
Working Note: Calculation of Profit & Loss on Sale of M1
| Particulars | Amount |
| Value of Machinery on Apr. 01, 2012 | 8,325 |
|
Less: Sale Value
|
3,000 |
| Loss on Sale | 5,325 |
Note: In order to make easy calculation, machinery purchased on July 01, 2010 has been divided into two parts i.e. M1 and M2.
Thus, M1: 1/3rd value i.e Rs 10,000 (sold for Rs 3,000)
M2: 2/3rd value i.e. Rs Rs 40,000 (remained in the business)
Page No 16.58:
Question 19:
On July 1, 2016 Pushpak Ltd. purchased a machinery for ₹ 5,70,000 and paid ₹ 30,000 for its overhauling and installation. Depreciation is provided @ 20% p.a. on Original Cost Method and the books are closed on 31st March every year. The machine was sold on 31st January 2019 for a sum of ₹ 1,60,000. You are required to show the Machinery Account and Provision for Depreciation Account for three years.
Answer:
| Machinery Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) | |
| 2016 | 2017 | |||||
| July 01 | Bank A/c (5,70,000 + 30,000) | 6,00,000 | Mar. 31 | Balance c/d | 6,00,000 | |
| 6,00,000 | 6,00,000 | |||||
| 2017 | 2018 | |||||
| Apr. 01 | Balance b/d | 6,00,000 | Mar. 31 | Balance c/d | 6,00,000 | |
| 6,00,000 | 6,00,000 | |||||
| 2018 | 2019 | |||||
| Apr. 01 | Balance b/d | 6,00,000 | Jan. 31 | Provision for Depreciation A/c | 3,10,000 | |
| Bank A/c (Sale) | 1,60,000 | |||||
| Profit and Loss A/c (Loss on Sale) | 1,30,000 | |||||
| 6,00,000 | 6,00,000 | |||||
| Provision for Depreciation Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (₹) |
Date | Particulars | Amount (₹) | |
| 2017 | 2017 | |||||
| Mar. 31 | Balance c/d | 90,000 | Mar. 31 | Depreciation A/c (for 9 months) | 90,000 | |
| 90,000 | 90,000 | |||||
| 2018 | 2017 | |||||
| Mar. 31 | Balance c/d | 2,10,000 | Apr. 01 | Balance b/d | 90,000 | |
| 2018 | ||||||
| Mar. 31 | Depreciation A/c | 1,20,000 | ||||
| 2,10,000 | 2,10,000 | |||||
| 2019 | 2018 | |||||
| Jan. 31 | Machinery A/c | 3,10,000 | Apr. 01 | Balance b/d | 2,10,000 | |
| 2019 | ||||||
| Jan. 31 | Depreciation A/c (for 10 months) | 1,00,000 | ||||
| 3,10,000 | 3,10,000 | |||||
Working Note: Calculation of Profit & Loss on Sale
| Particulars | Amount |
| Value of Machinery on July 01, 2016 | 6,00,000 |
|
Less: Depreciation for 9 Months
|
90,000 |
| Value of Machinery on Apr. 01, 2017 | 5,10,000 |
|
Less: Depreciation
|
1,20,000 |
| Value of Machinery on Apr. 01, 2018 | 3,90,000 |
|
Less: Depreciation for 10 Months
|
1,00,000 |
| Value of Machinery on Jan. 31, 2019 | 2,90,000 |
|
Less: Sale Value
|
1,60,000 |
| Loss on Sale | 1,30,000 |
Page No 16.58:
Question 20:
On 1st April 2008, a Company purchased 6 machines for ₹ 50,000 each. Depreciation at the rate of 10% p.a. is charged on Straight Line Method. The accounting year of the Company ends on 31st March and the depreciation is credited to a separate 'Provision for Depreciation Account'.
On 1st October, 2010, one machine was sold for ₹ 30,000 and on 1st April, 2011 a second machine was sold for ₹ 24,000.
You are required to prepare Machinery Account and Provision for Depreciation Account for four years ending 31st March, 2012.
Answer:
| Machinery Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |||
| 2008 | 2009 | |||||||
| Apr. 01 | Bank A/c | Mar. 31 | Balance c/d | |||||
|
M1
|
50,000 |
M1
|
50,000 | |||||
|
M2
|
50,000 |
M2
|
50,000 | |||||
|
M3
|
2,00,000 | 3,00,000 |
M3
|
2,00,000 | 3,00,000 | |||
| 3,00,000 | 3,00,000 | |||||||
| 2009 | 2010 | |||||||
| Apr. 01 | Balance b/d | Mar. 31 | Balance c/d | |||||
|
M1
|
50,000 |
M1
|
50,000 | |||||
|
M2
|
50,000 |
M2
|
50,000 | |||||
|
M3
|
2,00,000 | 3,00,000 |
M3
|
2,00,000 | 3,00,000 | |||
| 3,00,000 | 3,00,000 | |||||||
| 2010 | 2010 | |||||||
| Apr. 01 | Balance b/d | Oct. 01 | Provision for Depreciation A/c | 12,500 | ||||
|
M1
|
50,000 | Bank A/c (Sale of M1) | 30,000 | |||||
|
M2
|
50,000 | Profit and Loss A/c (Loss on Sale of M1) | 7,500 | |||||
|
M3
|
2,00,000 | 3,00,000 | 2011 | |||||
| Mar. 31 | Balance c/d | |||||||
|
M2
|
50,000 | |||||||
|
M3
|
2,00,000 | 2,50,000 | ||||||
| 3,00,000 | 3,00,000 | |||||||
| 2011 | 2011 | |||||||
| Apr. 01 | Balance b/d | Apr. 01 | Provision for Depreciation A/c | 15,000 | ||||
|
M2
|
50,000 | Bank A/c (Sale of M2) | 24,000 | |||||
|
M3
|
2,00,000 | 2,50,000 | Profit and Loss A/c (Loss on Sale of M2) | 11,000 | ||||
| 2012 | ||||||||
| Mar. 31 | Balance c/d (M3) | 2,00,000 | ||||||
| 2,50,000 | 2,50,000 | |||||||
| Provision for Depreciation Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |||
| 2009 | 2009 | |||||||
| Mar. 31 | Balance c/d | 30,000 | Mar. 31 | Depreciation A/c | ||||
|
M1
|
5,000 | |||||||
|
M2
|
5,000 | |||||||
|
M3
|
20,000 | 30,000 | ||||||
| 30,000 | 30,000 | |||||||
| 2010 | 2009 | |||||||
| Mar. 31 | Balance c/d | 60,000 | Apr. 01 | Balance b/d | 30,000 | |||
| 2010 | ||||||||
| Mar. 31 | Depreciation A/c | |||||||
|
M1
|
5,000 | |||||||
|
M2
|
5,000 | |||||||
|
M3
|
20,000 | 30,000 | ||||||
| 60,000 | 60,000 | |||||||
| 2010 | 2010 | |||||||
| Oct. 01 | Machinery A/c (M1) (5,000 + 5,000 + 2,500) |
12,500 | Apr. 01 | Balance b/d | 60,000 | |||
| 2011 | Oct.01 | Depreciation A/c (M1) | 2,500 | |||||
| Mar. 31 | Balance c/d | 75,000 | 2011 | |||||
| Mar. 31 | Depreciation A/c | |||||||
|
M2
|
5,000 | |||||||
|
M3
|
20,000 | 25,000 | ||||||
| 87,500 | 87,500 | |||||||
| 2011 | 2011 | |||||||
| Apr. 01 | Machinery A/c (M2) (5,000 + 5,000 + 5,000) |
15,000 | Apr. 01 | Balance b/d | 75,000 | |||
| 2012 | 2012 | |||||||
| Mar. 31 | Balance c/d | 80,000 | Mar. 31 | Depreciation A/c (M3) | 20,000 | |||
| 95,000 | 95,000 | |||||||
Working Notes:
WN1: Calculation of Profit & Loss on Sale of M1
| Particulars | Amount |
| Value of Machinery on Apr. 01, 2008 | 50,000 |
|
Less: Depreciation
|
5,000 |
| Value of Machinery on Apr. 01, 2009 | 45,000 |
|
Less: Depreciation
|
5,000 |
| Value of Machinery on Apr. 01, 2010 | 40,000 |
|
Less: Depreciation for 6 months
|
2,500 |
| Value of Machinery on Oct. 01, 2010 | 37,500 |
|
Less: Sale Value
|
30,000 |
| Loss on Sale | 7,500 |
WN2: Calculation of Profit & Loss on Sale of M2
| Particulars | Amount |
| Value of Machinery on Apr. 01, 2008 | 50,000 |
|
Less: Depreciation
|
5,000 |
| Value of Machinery on Apr. 01, 2009 | 45,000 |
|
Less: Depreciation
|
5,000 |
| Value of Machinery on Apr. 01, 2010 | 40,000 |
|
Less: Depreciation
|
5,000 |
| Value of Machinery on Apr. 01, 2011 | 35,000 |
|
Less: Sale Value
|
24,000 |
| Loss on Sale | 11,000 |
Note: For making calculation easy, Machinery purchased on April 01, 2008 has been divided into three i.e. M1, M2 and M3.
Thus, M1: Rs 50,000 (sold for Rs 30,000 on Oct. 01, 2010)
M3: Rs 2,00,000 (includes the cost of 4 machines)
Page No 16.59:
Question 21:
On 1st July 2015, ABC Ltd. purchase 4 machines for ₹ 80,000 each. The accounting year of the company ends on 31st March every year. Depreciation is provided at the rate of 15% p.a. on original cost.
On 1st April, 2017 one machine was sold for ₹ 50,000 and on 1st January, 2019 a second machine was sold for ₹ 40,000. Another machine with a higher capacity which cost ₹ 2,00,000 was purchased on 1st January, 2019.
You are required to show: (i) Machinery Account, (ii) Depreciation Account, and (iii) Provision for Depreciation Account for four years ending 31st March, 2019.
Answer:
| Machinery Account | |||||||
| Dr. | Cr. | ||||||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) | ||
| 2015 | 2016 | ||||||
| July 01 | Bank A/c | Mar. 31 | Balance c/d | ||||
|
M1
|
80,000 |
M1
|
80,000 | ||||
|
M2
|
80,000 |
M2
|
80,000 | ||||
|
M3
|
1,60,000 | 3,20,000 |
M3
|
1,60,000 | 3,20,000 | ||
| 3,20,000 | 3,20,000 | ||||||
| 2016 | 2017 | ||||||
| Apr. 01 | Balance b/d | Mar. 31 | Balance c/d | ||||
|
M1
|
80,000 |
M1
|
80,000 | ||||
|
M2
|
80,000 |
M2
|
80,000 | ||||
|
M3
|
1,60,000 | 3,20,000 |
M3
|
1,60,000 | 3,20,000 | ||
| 3,20,000 | 3,20,000 | ||||||
| 2017 | 2017 | ||||||
| Apr. 01 | Balance b/d | Apr. 01 | Provision for Depreciation A/c | 21,000 | |||
|
M1
|
80,000 | Apr. 01 | Bank A/c (Sale of M1 ) | 50,000 | |||
|
M2
|
80,000 | Apr. 01 | Profit and Loss A/c (Loss on Sale of M1) | 9,000 | |||
|
M3
|
1,60,000 | 3,20,000 | 2018 | ||||
| Mar. 31 | Balance c/d | ||||||
|
M2
|
80,000 | ||||||
|
M3
|
1,60,000 | 2,40,000 | |||||
| 3,20,000 | 3,20,000 | ||||||
| 2018 | 2019 | ||||||
| Apr. 01 | Balance b/d | Jan. 01 | Provision for Depreciation A/c | 42,000 | |||
|
M2
|
80,000 | Jan. 01 | Bank A/c (Sale of M2) | 40,000 | |||
|
M3
|
1,60,000 | 2,40,000 | Mar. 31 | Balance c/d | |||
| 2019 |
M3
|
1,60,000 | |||||
| Jan. 01 | Profit and Loss A/c (Profit on Sale of M2) | 2,000 |
M4
|
2,00,000 | 3,60,000 | ||
| Jan. 01 | Bank A/c (M4) | 2,00,000 | |||||
| 4,42,000 | 4,42,000 | ||||||
| Depreciation Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) | |
| 2016 | 2016 | |||||
| Mar.31 | Provision for Depreciation A/c | 36,000 | Mar.31 | Profit & Loss A/c | 36,000 | |
| 36,000 | 36,000 | |||||
| 2017 | 2017 | |||||
| Mar.31 | Provision for Depreciation A/c | 48,000 | Mar.31 | Profit & Loss A/c | 48,000 | |
| 48,000 | 48,000 | |||||
| 2018 | 2018 | |||||
| Mar.31 | Provision for Depreciation A/c | 36,000 | Mar.31 | Profit & Loss A/c | 36,000 | |
| 36,000 | 36,000 | |||||
| 2019 | 2019 | |||||
| Mar.31 | Provision for Depreciation A/c | 40,500 | Mar.31 | Profit & Loss A/c (31,500 + 9,000) | 40,500 | |
| 40,500 | 40,500 | |||||
| Provision for Depreciation Account | |||||||
| Dr. |
Cr.
|
||||||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) | ||
| 2016 | 2016 | ||||||
| Mar. 31 | Balance c/d | 36,000 | Mar. 31 | Depreciation A/c | |||
|
M1 (for 9 months)
|
9,000 | ||||||
|
M2 (for 9 months)
|
9,000 | ||||||
|
M3 (for 9 months)
|
18,000 | 36,000 | |||||
| 36,000 | 36,000 | ||||||
| 2017 | 2016 | ||||||
| Mar. 31 | Balance c/d | 84,000 | Apr. 01 | Balance b/d | 36,000 | ||
| 2017 | |||||||
| Mar. 31 | Depreciation A/c | ||||||
|
M1
|
12,000 | ||||||
|
M2
|
12,000 | ||||||
|
M3
|
24,000 | 48,000 | |||||
| 84,000 | 84,000 | ||||||
| 2017 | 2017 | ||||||
| Apr. 01 | Machinery A/c (9,000 + 12,000) | 21,000 | Apr. 01 | Balance b/d | 84,000 | ||
| 2018 | 2018 | ||||||
| Mar. 31 | Balance c/d | 99,000 | Mar. 31 | Depreciation A/c | |||
|
M2
|
12,000 | ||||||
|
M3
|
24,000 | 36,000 | |||||
| 1,20,000 | 1,20,000 | ||||||
| 2019 | 2018 | ||||||
| Jan. 01 | Machinery A/c (9,000 + 12,000 + 12,000 + 9,000) |
42,000 | Apr. 01 | Balance b/d | 99,000 | ||
| Mar. 31 | Balance c/d | 97,500 | 2019 | ||||
| Jan. 01 | Depreciation A/c (M2) | 9,000 | |||||
| Mar. 31 | Depreciation A/c | ||||||
|
M3
|
24,000 | ||||||
|
M4 (for 3 months)
|
7,500 | 31,500 | |||||
| 1,39,500 | 1,39,500 | ||||||
Working Notes:
WN1: Calculation of Profit & Loss on Sale M1
| Particulars | Amount |
| Value of Machinery on July 01, 2015 | 80,000 |
|
Less: Depreciation for 9 months
|
9,000 |
| Value of Machinery on Apr. 01, 2016 | 71,000 |
|
Less: Depreciation
|
12,000 |
| Value of Machinery on Apr. 01, 2017 | 59,000 |
|
Less: Sale Value
|
50,000 |
| Loss on Sale | 9,000 |
WN2: Calculation of Profit & Loss on Sale of M2
| Particulars | Amount |
| Value of Machinery on July 01, 2015 | 80,000 |
|
Less: Depreciation for 9 months
|
9,000 |
| Value of Machinery on Apr. 01, 2016 | 71,000 |
|
Less: Depreciation
|
12,000 |
| Value of Machinery on Apr. 01, 2017 | 59,000 |
|
Less: Depreciation
|
12,000 |
| Value of Machinery on Apr. 01, 2018 | 47,000 |
|
Less: Depreciation for 9 months
|
9,000 |
| Value of Machinery on Jan. 01, 2019 | 38,000 |
|
Less: Sale Value
|
40,000 |
| Profit on Sale | 2,000 |
Note: In order to make easy calculation, machinery purchased on July 01, 2015 has been divided into three parts i.e. M1, M2 and M3.
Thus, M1: Rs 80,000 (sold for Rs 50,000 on Apr. 01, 2017)
M3: Rs 1,60,000 (includes the cost of 2 machines)
Page No 16.59:
Question 22:
X Ltd. which closes its books of account every year on 31st March, purchased on 1st October, 2011 machinery costing ₹ 4,40,000. It purchased further machinery on 1st April, 2012 costing ₹ 5,20,000. On 30th June, 2013, the first machine was sold for ₹ 2,50,000 and on the same date a fresh machine was installed at a cost of ₹ 3,00,000. On 1st July 2014, the second machine purchased on 1st April 2012 was also sold for ₹ 3,25,000.
The company writes off depreciation at 10% p.a. on the Straight Line Method each year. Show the Machinery A/c, Depreciation A/c and Provision for Depreciation A/c for all the four years.
Answer:
| Machinery Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |||
| 2011 | 2012 | |||||||
| Oct. 01 | Bank A/c (M1) | 4,40,000 | Mar. 31 | Balance c/d | 4,40,000 | |||
| 4,40,000 | 4,40,000 | |||||||
| 2012 | 2013 | |||||||
| Apr. 01 | Balance b/d | 4,40,000 | Mar. 31 | Balance c/d | ||||
| Apr. 01 | Bank A/c (M2) | 5,20,000 |
M1
|
4,40,000 | ||||
|
M2
|
5,20,000 | 9,60,000 | ||||||
| 9,60,000 | 9,60,000 | |||||||
| 2013 | 2013 | |||||||
| Apr. 01 | Balance b/d | June 30 | Provision for Depreciation A/c | 77,000 | ||||
|
M1
|
4,40,000 | Bank A/c (Sale of M1 ) | 2,50,000 | |||||
|
M2
|
5,20,000 | 9,60,000 | Profit and Loss A/c (Loss on Sale of M1) | 1,13,000 | ||||
| June 30 | Bank A/c (M3) | 3,00,000 | 2014 | |||||
| Mar. 31 | Balance c/d | |||||||
|
M2
|
5,20,000 | |||||||
|
M3
|
3,00,000 | 8,20,000 | ||||||
| 12,60,000 | 12,60,000 | |||||||
| 2014 | 2014 | |||||||
| Apr. 01 | Balance b/d | July 01 | Provision for Depreciation A/c | 1,17,000 | ||||
|
M2
|
5,20,000 | Bank A/c (Sale of M2) | 3,25,000 | |||||
|
M3
|
3,00,000 | 8,20,000 | Profit and Loss A/c (Loss on Sale of M2) | 78,000 | ||||
| 2015 | ||||||||
| Mar. 31 | Balance c/d (M3) | 3,00,000 | ||||||
| 8,20,000 | 8,20,000 | |||||||
| Depreciation Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |
| 2012 | 2012 | |||||
| Mar. 31 | Provision for Depreciation A/c |
22,000 | Mar. 31 | Profit & Loss A/c | 22,000 | |
| 22,000 | 22,000 | |||||
| 2013 | 2013 | |||||
| Mar. 31 | Provision for Depreciation A/c |
96,000 | Mar. 31 | Profit & Loss A/c | 96,000 | |
| 96,000 | 96,000 | |||||
| 2014 | 2014 | |||||
| Mar. 31 | Provision for Depreciation A/c |
85,500 | Mar. 31 | Profit & Loss A/c (74,500 + 11,000) |
85,500 | |
| 85,500 | 85,500 | |||||
| 2015 | 2015 | |||||
| Mar. 31 | Provision for Depreciation A/c |
43,000 | Mar. 31 | Profit & Loss A/c (30,000 + 13,000) |
43,000 | |
| 43,000 | 43,000 | |||||
| Provision for Depreciation Account | |||||||
| Dr. | Cr. | ||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | ||
| 2012 | 2012 | ||||||
| Mar. 31 | Balance c/d (M1) | 22,000 | Mar. 31 | Depreciation A/c (M1) (for 6 months) |
22,000 | ||
| 22,000 | 22,000 | ||||||
| 2013 | 2012 | ||||||
| Mar. 31 | Balance c/d | 1,18,000 | Apr. 01 | Balance b/d | 22,000 | ||
| 2013 | |||||||
| Mar. 31 | Depreciation A/c | ||||||
|
M1
|
44,000 | ||||||
|
M2
|
52,000 | 96,000 | |||||
| 1,18,000 | 1,18,000 | ||||||
| 2013 | 2013 | ||||||
| June 30 | Machinery A/c (M1) (22,000 + 44,000 + 11,000) |
77,000 | Apr. 01 | Balance b/d | 1,18,000 | ||
| 2014 | June 30 | Depreciation A/c (M1) (for 3 months) |
11,000 | ||||
| Mar. 31 | Balance c/d | 1,26,500 | 2014 | ||||
| Mar. 31 | Depreciation A/c | ||||||
|
M2
|
52,000 | ||||||
|
M3 (for 9 months)
|
22,500 | 74,500 | |||||
| 2,03,500 | 2,03,500 | ||||||
| 2014 | 2014 | ||||||
| July 01 | Machinery A/c (M2) (52,000 + 52,000 + 13,000) |
1,17,000 | Apr. 01 | Balance b/d | 1,26,500 | ||
| 2015 | July 01 | Depreciation A/c (M2) (for 3 months) |
13,000 | ||||
| Mar. 31 | Balance c/d (M3) | 52,500 | 2015 | ||||
| Mar. 31 | Depreciation A/c (M3) | 30,000 | |||||
| 1,69,500 | 1,69,500 | ||||||
Working Notes:
WN1: Calculation of Profit & Loss on Sale of M1
| Particulars | Amount |
| Value of Machinery on Oct. 01, 2011 | 4,40,000 |
|
Less: Depreciation for 6 months
|
22,000 |
| Value of Machinery on Apr. 01, 2012 | 4,18,000 |
|
Less: Depreciation
|
44,000 |
| Value of Machinery on Apr. 01, 2013 | 3,74,000 |
|
Less: Depreciation for 3 months
|
11,000 |
| Value of Machinery on June 30, 2013 | 3,63,000 |
|
Less: Sale Value
|
2,50,000 |
| Loss on Sale | 1,13,000 |
WN2: Calculation of Profit & Loss on Sale of M2
| Particulars | Amount |
| Value of Machinery on Apr. 01, 2012 | 5,20,000 |
|
Less: Depreciation
|
52,000 |
| Value of Machinery on Apr. 01, 2013 | 4,68,000 |
|
Less: Depreciation
|
52,000 |
| Value of Machinery on Apr. 01, 2014 | 4,16,000 |
|
Less: Depreciation for 3 months
|
13,000 |
| Value of Machinery on June 30, 2014 | 4,03,000 |
|
Less: Sale Value
|
3,25,000 |
| Loss on Sale | 78,000 |
Page No 16.59:
Question 23:
A company purchased second-hand machinery on 1st May, 2009 for ₹ 5,85,000 and immediately spent ₹ 15,000 on its erection. On 1st October, 2010, it purchased another machine for ₹ 4,00,000. On 31st July, 2011, it sold off the first machine for ₹ 2,50,000 and bought another for ₹ 4,20,000. On 1st November, 2012, the second machine was also sold off for ₹ 3,00,000. Depreciation was provided on the machinery @ 15% p.a. on Equal Instalment Method.
Show the Machinery Account, Depreciation Account and Provision for Depreciation Account assuming that the books are closed on 31st March every year.
Answer:
| Machinery Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |||
| 2009 | 2010 | |||||||
| May 01 | Bank A/c (M1) (5,58,000 + 15,000) | 6,00,000 | Mar. 31 | Balance c/d | 6,00,000 | |||
| 6,00,000 | 6,00,000 | |||||||
| 2010 | 2011 | |||||||
| Apr. 01 | Balance b/d | 6,00,000 | Mar. 31 | Balance c/d | ||||
| Oct. 01 | Bank A/c (M2) | 4,00,000 |
M1
|
6,00,000 | ||||
|
M2
|
4,00,000 | 10,00,000 | ||||||
| 10,00,000 | 10,00,000 | |||||||
| 2011 | 2011 | |||||||
| Apr. 01 | Balance b/d | July 31 | Provision for Depreciation A/c | 2,02,500 | ||||
|
M1
|
6,00,000 | Bank A/c (Sale of M1) | 2,50,000 | |||||
|
M2
|
4,00,000 | 10,00,000 | Profit and Loss A/c (Loss on Sale of M1) | 1,47,500 | ||||
| July 31 | Bank A/c (M3) | 4,20,000 | 2012 | |||||
| Mar. 31 | Balance c/d | |||||||
|
M2
|
4,00,000 | |||||||
|
M3
|
4,20,000 | 8,20,000 | ||||||
| 14,20,000 | 14,20,000 | |||||||
| 2012 | 2012 | |||||||
| Apr. 01 | Balance b/d | Nov. 01 | Provision for Depreciation A/c | 1,25,000 | ||||
|
M2
|
4,00,000 | Bank A/c (Sale of M2) | 3,00,000 | |||||
|
M3
|
4,20,000 | 8,20,000 | 2013 | |||||
| Nov. 01 | Profit and Loss A/c (Profit on Sale of M2) | 25,000 | Mar. 31 | Balance c/d (M3) | 4,20,000 | |||
| 8,45,000 | 8,45,000 | |||||||
| Depreciation Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |
| 2010 | 2010 | |||||
| Mar. 31 | Provision for Depreciation A/c | 82,500 | Mar. 31 | Profit & Loss A/c | 82,500 | |
| 82,500 | 82,500 | |||||
| 2011 | 2011 | |||||
| Mar. 31 | Provision for Depreciation A/c | 1,20,000 | Mar. 31 | Profit & Loss A/c | 1,20,000 | |
| 1,20,000 | 1,20,000 | |||||
| 2012 | 2012 | |||||
| Mar. 31 | Provision for Depreciation A/c | 1,32,000 | Mar. 31 | Profit & Loss A/c (1,02,000 + 30,000) |
1,32,000 | |
| 1,32,000 | 1,32,000 | |||||
| 2013 | 2013 | |||||
| Mar. 31 | Provision for Depreciation A/c | 98,000 | Mar. 31 | Profit & Loss A/c (63,000 + 35,000) |
98,000 | |
| 98,000 | 98,000 | |||||
| Provision for Depreciation Account | |||||||
| Dr. | Cr. | ||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | ||
| 2010 | 2010 | ||||||
| Mar. 31 | Balance c/d | 82,500 | Mar. 31 | Depreciation A/c (M1) (for 11 months) | 82,500 | ||
| 82,500 | 82,500 | ||||||
| 2011 | 2010 | ||||||
| Mar. 31 | Balance c/d | 2,02,500 | Apr. 01 | Balance b/d | 82,500 | ||
| 2011 | |||||||
| Mar. 31 | Depreciation A/c | ||||||
|
M1
|
90,000 | ||||||
|
M2 (for 6 months)
|
30,000 | 1,20,000 | |||||
| 2,02,500 | 2,02,500 | ||||||
| 2011 | 2011 | ||||||
| July 31 | Machinery A/c (82,500 + 90,000 + 30,000) |
2,02,500 | Apr. 01 | Balance b/d | 2,02,500 | ||
| 2012 | July 31 | Depreciation A/c (M1) (for 4 months) |
30,000 | ||||
| Mar. 31 | Balance c/d | 1,32,000 | 2012 | ||||
| Mar. 31 | Depreciation A/c | ||||||
|
M2
|
60,000 | ||||||
|
M3 (for 8 months)
|
42,000 | 1,02,000 | |||||
| 3,34,500 | 3,34,500 | ||||||
| 2011 | 2012 | ||||||
| Nov. 01 | Machinery A/c (30,000 + 60,000 + 35,000) |
1,25,000 | Apr. 01 | Balance b/d | 1,32,000 | ||
| 2013 | Nov. 01 | Depreciation A/c (M2) (for 7 months) | 35,000 | ||||
| Mar. 31 | Balance c/d | 1,05,000 | 2013 | ||||
| Mar. 31 | Depreciation A/c (M3) | 63,000 | |||||
| 2,30,000 | 2,30,000 | ||||||
Working Notes:
WN1: Calculation of Profit & Loss on Sale of M1
| Particulars | Amount |
| Value of Machinery on May 01, 2009 | 6,00,000 |
|
Less: Depreciation for 11 months
|
82,500 |
| Value of Machinery on Apr. 01, 2010 | 5,17,500 |
|
Less: Depreciation
|
90,000 |
| Value of Machinery on Apr. 01, 2011 | 4,27,500 |
|
Less: Depreciation for 4 months
|
30,000 |
| Value of Machinery on July 31, 2011 | 3,97,500 |
|
Less: Sale Value
|
2,50,000 |
| Loss on Sale | 1,47,500 |
WN2: Calculation of Profit & Loss on Sale of M2
| Particulars | Amount |
| Value of Machinery on Oct. 01, 2010 | 4,00,000 |
|
Less: Depreciation for 6 months
|
30,000 |
| Value of Machinery on Apr. 01, 2011 | 3,70,000 |
|
Less: Depreciation
|
60,000 |
| Value of Machinery on Apr. 01, 2012 | 3,10,000 |
|
Less: Depreciation for 7 months
|
35,000 |
| Value of Machinery on Nov. 01, 2012 | 2,75,000 |
|
Less: Sale Value
|
3,00,000 |
| Profit on Sale | 25,000 |
Page No 16.59:
Question 24:
X Ltd. purchased a plant on 1st July, 2010 costing ₹ 5,00,000. It purchased another plant on 1st September, 2010 costing ₹ 3,00,000. On 31st December, 2012, the plant purchased on 1st July, 2010 got out of order and was sold for ₹ 2,15,000. Another plant was purchased to replace the same for ₹ 6,00,000. Depreciation is to be provided at 20% p.a. according to Writen Down Value Method. The accounts are closed every year on 31st March.
Show the Plant Account and Provision for Depreciation Account.
Answer:
| Plant Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |||
| 2010 | 2011 | |||||||
| July 01 | Bank A/c (P1) | 5,00,000 | Mar. 31 | Balance c/d | ||||
| Sept. 01 | Bank A/c (P2) | 3,00,000 |
P1
|
5,00,000 | ||||
|
P2
|
3,00,000 | 8,00,000 | ||||||
| 8,00,000 | 8,00,000 | |||||||
| 2011 | 2012 | |||||||
| Apr. 01 | Balance b/d | Mar. 31 | Balance c/d | |||||
|
P1
|
5,00,000 |
P1
|
5,00,000 | |||||
|
P2
|
3,00,000 | 8,00,000 |
P2
|
3,00,000 | 8,00,000 | |||
| 8,00,000 | 8,00,000 | |||||||
| 2012 | 2012 | |||||||
| Apr. 01 | Balance b/d | Dec. 31 | Provision for Depreciation A/c | 2,11,000 | ||||
|
P1
|
5,00,000 | Bank A/c (Sale of P1) | 2,15,000 | |||||
|
P2
|
3,00,000 | 8,00,000 | Profit and Loss A/c (Loss on Sale of P1) | 74,000 | ||||
| Dec. 31 | Bank A/c (P3) | 6,00,000 | 2013 | |||||
| Mar. 31 | Balance c/d | |||||||
|
P2
|
3,00,000 | |||||||
|
P3
|
6,00,000 | 9,00,000 | ||||||
| 14,00,000 | 14,00,000 | |||||||
| Provision for Depreciation Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |||
| 2011 | 2011 | |||||||
| Mar. 31 | Balance c/d | 1,10,000 | Mar. 31 | Depreciation A/c | ||||
|
P1 (for 9 months)
|
75,000 | |||||||
|
P2 (for 7 months)
|
35,000 | 1,10,000 | ||||||
| 1,10,000 | 1,10,000 | |||||||
| 2012 | 2011 | |||||||
| Mar. 31 | Balance c/d | 2,48,000 | Apr. 01 | Balance b/d | 1,10,000 | |||
| 2012 | ||||||||
| Mar. 31 | Depreciation A/c | |||||||
|
P1
|
85,000 | |||||||
|
P2
|
53,000 | 1,38,000 | ||||||
| 2,48,000 | 2,48,000 | |||||||
| 2012 | 2012 | |||||||
| Dec. 31 | Machinery A/c (75,000 + 85,000 + 66,000) | 2,11,000 | Apr. 01 | Balance b/d | 2,48,000 | |||
| 2013 | Dec. 31 | Depreciation A/c (P1) (for 9 months) | 51,000 | |||||
| Mar. 31 | Balance c/d | 1,60,400 | 2013 | |||||
| Mar. 31 | Depreciation A/c | |||||||
|
P2
|
42,400 | |||||||
|
P3 (for 3 months)
|
30,000 | 72,400 | ||||||
| 3,71,400 | 3,71,400 | |||||||
Working Note: Calculation of Profit & Loss on Sale of P1
| Particulars | Amount |
| Value of Plant on July 01, 2010 | 5,00,000 |
|
Less: Depreciation for 9 months
|
75,000 |
| Value of Plant on Apr. 01, 2011 | 4,25,000 |
|
Less: Depreciation
|
85,000 |
| Value of Plant on Apr. 01, 2012 | 3,40,000 |
|
Less: Depreciation for 9 months
|
51,000 |
| Value of Plant on Dec. 31, 2012 | 2,89,000 |
|
Less: Sale Value
|
2,15,000 |
| Loss on Sale | 74,000 |
Page No 16.60:
Question 25:
On 1st August, 2010, Hindustan Toys Ltd. purchased a plant for ₹ 12,00,000. The firm writes off depreciation at 10% p.a. on the diminishing balance and the books are closed on 31st March each year. On 1st July, 2012, a part of this plant of which the original cost was ₹ 1,80,000 was sold for ₹ 1,00,000 and on the same date a new plant was purchased for ₹ 4,00,000. Show the Plant Account and Provision for Depreciation Account for three years ending 31st March, 2013.
Answer:
| Plant Account | |||||||
| Dr. | Cr. | ||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | ||
| 2010 | 2011 | ||||||
| Aug. 01 | Bank A/c | Mar. 31 | Balance c/d | ||||
|
P1
|
1,80,000 |
P1
|
1,80,000 | ||||
|
P2
|
10,20,000 | 12,00,000 |
P2
|
10,20,000 | 12,00,000 | ||
| 12,00,000 | 12,00,000 | ||||||
| 2011 | 2012 | ||||||
| Apr. 01 | Balance b/d | Mar. 31 | Balance c/d | ||||
|
P1
|
1,80,000 |
P1
|
1,80,000 | ||||
|
P2
|
10,20,000 | 12,00,000 |
P2
|
10,20,000 | 12,00,000 | ||
| 12,00,000 | 12,00,000 | ||||||
| 2012 | 2012 | ||||||
| Apr. 01 | Balance b/d | July 01 | Provision for Depreciation A/c | 32,580 | |||
|
P1
|
1,80,000 | Bank A/c (Sale of P1) | 1,00,000 | ||||
|
P2
|
10,20,000 | 12,00,000 | Profit and Loss A/c (Loss on Sale of P1) | 47,420 | |||
| July 01 | Bank A/c (P3) | 4,00,000 | 2013 | ||||
| Mar. 31 | Balance c/d | ||||||
|
P2
|
10,20,000 | ||||||
|
P3
|
4,00,000 | 14,20,000 | |||||
| 16,00,000 | 16,00,000 | ||||||
| Provision for Depreciation Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |
| 2011 | 2011 | |||||
| Mar. 31 | Balance c/d | 80,000 | Mar. 31 | Depreciation A/c | ||
|
P1 (for 8 months)
|
12,000 | |||||
|
P2 (for 8 months)
|
68,000 | 80,000 | ||||
| 80,000 | 80,000 | |||||
| 2012 | 2011 | |||||
| Mar. 31 | Balance c/d | 1,92,000 | Apr. 01 | Balance b/d | 80,000 | |
| 2012 | ||||||
| Mar. 31 | Depreciation A/c | |||||
|
P1
|
16,800 | |||||
|
P2
|
95,200 | 1,12,000 | ||||
| 1,92,000 | 1,92,000 | |||||
| 2012 | 2012 | |||||
| July 01 | Plant A/c (P1) (12,000 + 16,800 + 3,780) |
32,580 | Apr. 01 | Balance b/d | 1,92,000 | |
| 2013 | July 01 | Depreciation A/c (P1) (for 3 months) |
3,780 | |||
| Mar. 31 | Balance c/d | 2,78,880 | 2013 | |||
| Mar. 31 | Depreciation A/c | |||||
|
P2
|
85,680 | |||||
|
P3 (for 9 months)
|
30,000 | 1,15,680 | ||||
| 3,11,460 | 3,11,460 | |||||
Working Note: Calculation of Profit & Loss on Sale of P1
| Particulars | Amount |
| Value of Plant on Aug. 01, 2010 | 1,80,000 |
|
Less: Depreciation for 8 months
|
12,000 |
| Value of Plant on Apr. 01, 2011 | 1,68.000 |
|
Less: Depreciation
|
16,800 |
| Value of Plant on Apr. 01, 2012 | 1,51,200 |
|
Less: Depreciation for 3 months
|
3,780 |
| Value of Plant on July 01, 2012 | 1,47,420 |
|
Less: Sale Value
|
1,00,000 |
| Loss on Sale | 47,420 |
Note: In order to make easy calculation, plant purchased on Aug. 01, 2010 has been divided into two parts i.e. P1 and P2.
Thus, P1: Rs 1,80,000 (sold for Rs 1,00,000 on July 01, 2012)
P2: Rs 10,20,000
Page No 16.60:
Question 26:
On 1st April 2012, Banglore Silk Ltd. purchased a machinery for ₹ 20,00,000. It provides depreciation at 10% p.a. on the Written Down Value Method and closes its books on 31st March every year. On 1st July 2014, a part of the machinery purchased on 1st April 2012 for ₹ 4,00,000 was sold for ₹ 3,20,000. On 1st November 2014, a new machinery was purchased for ₹ 4,80,000. You are required to prepare Machinery Account, Depreciation Account and Provision for Depreciation Account for three years ending 31st March 2015.
Answer:
| Machinery Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |||
| 2012 | 2013 | |||||||
| Apr. 01 | Bank A/c | Mar. 31 | Balance c/d | |||||
|
M1
|
4,00,000 |
M1
|
4,00,000 | |||||
|
M2
|
16,00,000 | 20,00,000 |
M2
|
16,00,000 | 20,00,000 | |||
| 20,00,000 | 20,00,000 | |||||||
| 2013 | 2014 | |||||||
| Apr. 01 | Balance b/d | Mar. 31 | Balance c/d | 20,00,000 | ||||
|
M1
|
4,00,000 |
M1
|
4,00,000 | |||||
|
M2
|
16,00,000 | 20,00,000 |
M2
|
16,00,000 | 20,00,000 | |||
| 20,00,000 | 20,00,000 | |||||||
| 2014 | 2014 | |||||||
| Apr. 01 | Balance b/d | July 01 | Provision for Depreciation A/c | 84,100 | ||||
|
M1
|
4,00,000 | July 01 | Bank A/c (Sale of M1) | 3,20,000 | ||||
|
M2
|
16,00,000 | 20,00,000 | 2015 | |||||
| July 01 | Profit and Loss A/c (Profit on Sale of M1) |
4,100 | Mar. 31 | Balance c/d | ||||
| Nov. 01 | Bank A/c (M3) | 4,80,000 |
M2
|
16,00,000 | ||||
|
M3
|
4,80,000 | 20,80,000 | ||||||
| 24,84,100 | 24,84,100 | |||||||
| Depreciation Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |
| 2013 | 2013 | |||||
| Mar.31 | Provision for Depreciation A/c | 2,00,000 | Mar.31 | Profit and Loss A/c | 2,00,000 | |
| 2,00,000 | 2,00,000 | |||||
| 2014 | 2014 | |||||
| Mar.31 | Provision for Depreciation A/c | 1,80,000 | Mar.31 | Profit and Loss A/c | 1,80,000 | |
| 1,80,000 | 1,80,000 | |||||
| 2015 | 2015 | |||||
| Mar.31 | Provision for Depreciation A/c | 1,57,700 | Mar.31 | Profit and Loss A/c (1,47,600 + 8,100) | 1,57,700 | |
| 1,57,700 | 1,57,700 | |||||
| Provision for Depreciation Account | |||||||
| Dr. | Cr. | ||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | ||
| 2013 | 2013 | ||||||
| Mar. 31 | Balance c/d | 2,00,000 | Mar. 31 | Depreciation A/c | |||
|
M1
|
40,000 | ||||||
|
M2
|
1,60,000 | 2,00,000 | |||||
| 2,00,000 | 2,00,000 | ||||||
| 2014 | 2013 | ||||||
| Mar. 31 | Balance c/d | 3,80,000 | Apr. 01 | Balance b/d | 2,00,000 | ||
| 2014 | |||||||
| Mar. 31 | Depreciation A/c | ||||||
|
M1
|
36,000 | ||||||
|
M2
|
1,44,000 | 1,80,000 | |||||
| 3,80,000 | 3,80,000 | ||||||
| 2014 | 2014 | ||||||
| July 01 | Machinery A/c (M1) (40,000 + 36,000 + 8,100) |
84,100 | Apr. 01 | Balance b/d | 3,80,000 | ||
| 2015 | July 01 | Depreciation A/c (M1) (for 3 months) | 8,100 | ||||
| Mar. 31 | Balance c/d | 4,53,600 | 2015 | ||||
| Mar. 31 | Depreciation A/c | ||||||
|
M2
|
1,29,600 | ||||||
|
M3 (for 5 months)
|
20,000 | 1,49,600 | |||||
| 5,37,700 | 5,37,700 | ||||||
Working Note: Calculation of Profit & Loss on Sale of M1
| Particulars | Amount |
| Value of Machinery on Apr. 01, 2012 | 4,00,000 |
|
Less: Depreciation
|
40,000 |
| Value of Machinery on Apr. 01, 2013 | 3,60,000 |
|
Less: Depreciation
|
36,000 |
| Value of Machinery on Apr. 01, 2013 | 3,24,000 |
|
Less: Depreciation for 3 months
|
8,100 |
| Value of Machinery on July 01, 2014 | 3,15,900 |
|
Less: Sale Value
|
3,20,000 |
| Profit on Sale | 4,100 |
Note: In order to make easy calculation, machinery purchased on Apr. 01, 2012 has been divided into two parts i.e. M1 and M2.
Thus, M1: Rs 4,00,000 (sold for Rs 3,20,000 on July 01, 2014)
M2: Rs 16,00,000
Page No 16.60:
Question 27:
Binny Textiles Ltd. which depreciates its machinery at 20% p.a. on diminishing balance method, purchased a machine for ₹ 6,00,000 on 1st October, 2010. It closes its books on 31st March every year. On 1st January, 2012, it purchased another machine for ₹ 1,50,000. On 1st December, 2012, one-third of the machinery purchased on 1st October, 2010 was sold for ₹ 80,000.
You are required to prepare Machinery A/c and Provision for Depreciation A/c for the relevant years.
Answer:
| Machinery Account | |||||||
| Dr. | Cr. | ||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | ||
| 2010 | 2011 | ||||||
| Oct. 01 | Bank A/c | Mar. 31 | Balance c/d | ||||
|
M1
|
2,00,000 |
M1
|
2,00,000 | ||||
|
M2
|
4,00,000 | 6,00,000 |
M2
|
4,00,000 | 6,00,000 | ||
| 6,00,000 | 6,00,000 | ||||||
| 2011 | 2012 | ||||||
| Apr. 01 | Balance b/d | Mar. 31 | Balance c/d | ||||
|
M1
|
2,00,000 |
M1
|
2,00,000 | ||||
|
M2
|
4,00,000 | 6,00,000 |
M2
|
4,00,000 | |||
| 2012 |
M3
|
1,50,000 | 7,50,000 | ||||
| Dec. 01 | Bank A/c (M3) | 1,50,000 | |||||
| 7,50,000 | 7,50,000 | ||||||
| 2012 | 2012 | ||||||
| Apr. 01 | Balance b/d | Dec. 01 | Provision for Depreciation A/c | 75,200 | |||
|
M1
|
2,00,000 | Bank A/c (Sale of M1) | 80,000 | ||||
|
M2
|
4,00,000 | Profit and Loss A/c (Loss on Sale of M1) | 44,800 | ||||
|
M3
|
1,50,000 | 7,50,000 | 2013 | ||||
| Mar. 31 | Balance c/d | ||||||
|
M2
|
4,00,000 | ||||||
|
M3
|
1,50,000 | 5,50,000 | |||||
| 7,50,000 | 7,50,000 | ||||||
| Provision for Depreciation Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |
| 2011 | 2011 | |||||
| Mar. 31 | Balance c/d | 60,000 | Mar. 31 | Depreciation A/c | ||
|
M1 (for 6 months)
|
20,000 | |||||
|
M2 (for 6 months)
|
40,000 | 60,000 | ||||
| 60,000 | 60,000 | |||||
| 2012 | 2011 | |||||
| Mar. 31 | Balance c/d | 1,75,500 | Apr. 01 | Balance b/d | 60,000 | |
| 2012 | ||||||
| Mar. 31 | Depreciation A/c | |||||
|
M1
|
36,000 | |||||
|
M2
|
72,000 | |||||
|
M3 (for 3 months)
|
7,500 | 1,15,500 | ||||
| 1,75,500 | 1,75,500 | |||||
| 2012 | 2012 | |||||
| Dec. 01 | Machinery A/c (M1) (20,000 + 36,000 + 19,200) |
75,200 | Apr. 01 | Balance b/d | 1,75,500 | |
| 2013 | Dec. 01 | Depreciation A/c (M1) (for 8 months) |
19,200 | |||
| Mar. 31 | Balance c/d | 2,05,600 | 2013 | |||
| Mar. 31 | Depreciation A/c | |||||
|
M2
|
57,600 | |||||
|
M3
|
28,500 | 86,100 | ||||
| 2,80,800 | 2,80,800 | |||||
Working Note: Calculation of Profit & Loss on Sale of M1
| Particulars | Amount |
| Value of Machinery on Oct. 01, 2010 | 2,00,000 |
|
Less: Depreciation for 6 months
|
20,000 |
| Value of Machinery on Apr. 01, 2011 | 1,80,000 |
|
Less: Depreciation
|
36,000 |
| Value of Machinery on Apr. 01, 2012 | 1,44,000 |
|
Less: Depreciation for 8 months
|
19,200 |
| Value of Machinery on Dec. 01, 2012 | 1,24,800 |
|
Less: Sale Value
|
80,000 |
| Loss on Sale | 44,800 |
Note: In order to make easy calculation, machinery purchased on Apr. 01, 2012 has been divided into two parts i.e. M1 and M2.
Thus, M1: Rs 2,00,000 (1/3rd value of machinery, sold for Rs 80,000 on Dec. 01, 2012)
M2: Rs 4,00,000 (2/3rd value of machinery)
Page No 16.60:
Question 28:
The following balances appear in the books of Y Ltd:
| ₹ | |
| Machinery A/c as on 1-4-2014 | 8,00,000 |
| Provision for Depreciation A/c as on 1-4-2014 | 3,10,000 |
On 1-7-2014, a machinery which was purchased on 1-4-2011 for ₹ 1,20,000 was sold for ₹ 50,000 and on the same date another machinery was purchased for ₹ 3,20,000.
The firm has been charging depreciation at 15% p.a. on Original Cost Method and closes its books on 31st March every year. Prepare the Machinery A/c and Provision for Depreciation A/c for the year ending 31st March 2015.
Answer:
| Machinery Account | ||||||
| Dr. |
Cr.
|
|||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |
| 2014 | 2014 | |||||
| Apr. 01 | Balance b/d (6,80,000 + 1,20,000) | 8,00,000 | July 01 | Provision for Depreciation A/c | 58,500 | |
| July 01 | Bank A/c | 3,20,000 | Bank A/c (Sale) | 50,000 | ||
| Profit and Loss A/c (Loss on Sale) | 11,500 | |||||
| 2015 | ||||||
| Mar. 31 | Balance c/d | 10,00,000 | ||||
| 11,20,000 | 11,20,000 | |||||
| Provision for Depreciation Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |
| 2014 | 2014 | |||||
| July 01 | Machinery A/c (54,000 + 4,500) | 58,500 | Apr. 01 | Balance b/d | 3,10,000 | |
| 2015 | 2015 | |||||
| Mar. 31 | Balance c/d | 3,94,000 | Mar. 31 | Depreciation A/c (WN2) | 1,42,500 | |
| 4,52,500 | 4,52,200 | |||||
Working Notes:
WN1: Calculation of Profit & Loss on Sale
| Particulars | Amount |
| Value of Machinery on Apr. 01, 2011 | 1,20,000 |
|
Less: Depreciation for 3 Years 3 months
|
58,500 |
| Value of Machinery July 01, 2014 | 61,500 |
|
Less: Sale Value
|
50,000 |
| Loss on Sale | 11,500 |
WN2: Depreciation charged during the year
| Particulars | Amount |
| On Rs 6,80,000 @ 15% | 1,02,000 |
| On Rs 1,20,000 @ 15% for 3 months | 4,500 |
| On Rs 3,20,000 @ 15% for 9 months | 36,000 |
| 1,42,500 |
Page No 16.61:
Question 29:
On 1st April, 2018, following balances appeared in the books of M/s Krishna Traders:
| ₹ | |
| Furniture Account | 50,000 |
| Provision for Depreciation on Furniture Account | 22,000 |
On 1st October, 2018 a part of Furniture purchased for ₹ 20,000 on 1st April, 2014 was sold for ₹ 5,000. On the same date a new furniture costing ₹ 25,000 was purchased.
The depreciation was provided @ 10% p.a. on original cost of the asset and no depreciation was charged on the asset in the year of sale. Prepare 'Furniture Account' and 'Provision for Depreciation Account' for the year ending 31st March, 2019.
Answer:
| Furniture Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) | |
| 2018 | 2018 | |||||
| Apr. 01 | Balance b/d (30,000 + 20,000) | 50,000 | Oct. 01 | Provision for Depreciation A/c | 8,000 | |
| Oct. 01 | Bank A/c | 25,000 | Oct. 01 | Bank A/c (Sale ) | 5,000 | |
| Oct. 01 | Profit and Loss A/c (Loss on Sale) | 7,000 | ||||
| 2019 | ||||||
| Mar. 31 | Balance c/d | 55,000 | ||||
| 75,000 | 75,000 | |||||
| Provision for Depreciation Account | ||||||
| Dr. |
Cr.
|
|||||
| Date | Particulars | Amount (₹) |
Date | Particulars | Amount (₹) |
|
| 2018 | 2018 | |||||
| Oct.01 | Furniture A/c | 8,000 | Apr.01 | Balance b/d | 22,000 | |
| 2019 | 2019 | |||||
| Mar.31 | Balance c/d | 18,250 | Mar.31 | Depreciation A/c (WN2) | 4,250 | |
| 26,250 | 26,250 | |||||
Working Notes:
WN1: Calculation of Profit & Loss on Sale
| Particulars | Amount |
| Value of Furniture on Apr. 01, 2014 | 20,000 |
|
Less: Depreciation for 4 Years @ 10%
|
8,000 |
| Value of Furniture on Oct. 01, 2018 | 12,000 |
|
Less: Sale Value
|
5,000 |
| Loss on Sale | 7,000 |
WN2: Depreciation charged during the year
| Particulars | Amount |
| On Rs 30,000 @ 10% | 3,000 |
| On Rs 25,000 @ 10% for 6 months | 1,250 |
| 4,250 | |
Page No 16.61:
Question 30:
Books of Mumbai Chemicals Ltd. showed the following balances on 1st April 2012:
| Machinery A/c | ₹ 10,00,000 |
| Provision for Depreciation A/c | ₹ 4,05,000 |
On 1st April, 2012, a machine which had a cost of ₹ 2,00,000 on 1st October, 2009 was sold for ₹ 80,000. The firm writes off depreciation @ 10% p.a. under the Reducing Balance Method and its accounts are made up on 31st March each year. You are required to prepare the Machinery A/c and Provision for Depreciation A/c for the year ending 31st March, 2013.
Answer:
| Machinery Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |
| 2012 | 2012 | |||||
| Apr.01 | Balance b/d (8,00,000 + 2,00,000) | 10,00,000 | Apr.01 | Provision for Depreciation A/c | 46,100 | |
| Bank A/c (Sale ) | 80,000 | |||||
| Profit and Loss A/c (Loss on Sale) | 73,900 | |||||
| 2013 | ||||||
| Mar.31 | Balance c/d | 8,00,000 | ||||
| 10,00,000 | 10,00,000 | |||||
| Provision for Depreciation Account | |||||||
| Dr. | Cr. | ||||||
| Date | Particulars | Amount (Rs) |
Date | Particulars | Amount (Rs) |
||
| 2012 | 2012 | ||||||
| Apr. 01 | Machinery A/c | 46,100 | Apr. 01 | Balance b/d | 4,05,000 | ||
| 2013 | M1 | 46,100 | |||||
| Mar. 31 | Balance c/d | 4,03,010 | M2 | 3,28,900 | 4,05,000 | ||
| 2013 | |||||||
| Mar. 31 | Depreciation A/c (WN2) | 44,110 | |||||
| 4,49,110 | 4,49,110 | ||||||
Working Notes:
WN1: Calculation of Profit & Loss on Sale
| Particulars | Amount |
| Value of Machinery on Oct. 01, 2009 | 2,00,000 |
|
Less: Depreciation for 6 months
|
10,000 |
| Value of Machinery on Apr. 01, 2010 | 1,90,000 |
|
Less: Depreciation
|
19,000 |
| Value of Machinery on Apr. 01, 2011 | 1,71,000 |
|
Less: Depreciation
|
17,100 |
| Value of Machinery on Apr. 01,2012 | 1,53,900 |
|
Less: Sale Value
|
80,000 |
| Loss on Sale | 73,900 |
WN2: Calculation of Depreciation on remaining value of Machinery
Page No 16.61:
Question 31:
On 1st July, 2010, X Ltd. purchased a machinery for ₹ 15,00,000. Depreciation is provided @ 20% p.a. on the original cost of the machinery and books are closed on 31st March each year. On 31st May, 2012, a part of this machine purchased on 1st July 2010 for ₹ 3,60,000 was sold for ₹ 2,40,000 and on the same date new machinery was purchased for ₹ 4,20,000. You are required to prepare (a) Machinery Account, (b) Provision for Depreciation Account, and (c) Machinery Disposal Account.
Answer:
| Machinery Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |
| 2010 | 2011 | |||||
| July 01 | Bank A/c (11,40,000 + 3,60,000) | 15,00,000 | Mar. 31 | Balance c/d | 15,00,000 | |
| 15,00,000 | 15,00,000 | |||||
| 2011 | 2012 | |||||
| Apr. 01 | Balance b/d | 15,00,000 | Mar. 31 | Balance c/d | 15,00,000 | |
| 15,00,000 | 15,00,000 | |||||
| 2012 | 2012 | |||||
| Apr. 01 | Balance b/d | 15,00,000 | May 31 | Machinery Disposal A/c | 3,60,000 | |
| May 31 | Bank A/c | 4,20,000 | 2013 | |||
| Mar. 31 | Balance c/d | 15,60,000 | ||||
| 19,20,000 | 19,20,000 | |||||
| Machinery Disposal A/c | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (Rs) |
Date | Particulars | Amount (Rs) |
|
| 2012 | 2012 | |||||
| May 31 | Machinery A/c | 3,60,000 | May 31 | Provision for Depreciation A/c | 1,38,000 | |
| May 31 | Profit and Loss A/c (Profit on Sale) |
18,000 | Bank A/c (Sale) | 2,40,000 | ||
| 3,78,000 | 3,78,000 | |||||
| Provision for Depreciation Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (Rs) |
Date | Particulars | Amount (Rs) | |
| 2011 | 2011 | |||||
| Mar. 31 | Balance c/d | 2,25,000 | Mar. 31 | Balance b/d (for 9 months) | 2,25,000 | |
| 2,25,000 | 2,25,000 | |||||
| 2012 | 2011 | |||||
| Mar. 31 | Balance c/d | 5,25,000 | Apr. 01 | Balance b/d | 2,25,000 | |
| 2012 | ||||||
| Mar. 31 | Depreciation A/c | 3,00,000 | ||||
| 5,25,000 | 5,25,000 | |||||
| 2012 | 2012 | |||||
| May 31 | Machine Disposal A/c (54,000 + 72,000 + 12,000) |
1,38,000 | Apr. 01 | Balance b/d | 5,25,000 | |
| 2013 | May 31 | Depreciation (for 2 months) | 12,000 | |||
| Mar. 31 | Balance c/d | 6,97,000 | 2013 | |||
| Mar. 31 | Depreciation A/c (WN2) | 2,98,000 | ||||
| 8,35,000 | 8,35,000 | |||||
Working Notes:
WN1: Calculation of Profit & Loss on Sale
| Particulars | Amount |
| Value of Machinery on July 01, 2010 | 3,60,000 |
|
Less: Depreciation for 9 months
|
54,000 |
| Value of Machinery on Apr. 01, 2011 | 3,06,000 |
|
Less: Depreciation
|
72,000 |
| Value of Machinery on Apr. 01, 2012 | 2,34,000 |
|
Less: Depreciation for 2 months
|
12,000 |
| Value of Machinery on May 31, 2012 | 2,22,000 |
|
Less: Sale Value
|
2,40,000 |
| Profit on Sale | 18,000 |
WN2: Depreciation charged during the year
| Particulars | Amount |
| On Rs 11,40,000 @ 20% | 2,28,000 |
| On Rs 4,20,000 @ 20% for 10 months | 70,000 |
| 2,98,000 |
Page No 16.62:
Question 32:
On 1st September 2011, Gopal Ltd. purchased a plant for ₹ 10,20,000. On 1st July 2012 another plant was purchased for ₹ 6,00,000. The firm writes off depreciation @ 10% p.a. on original cost and its accounts are closed every year on 31st March. On 1st October 2014, a part of the second plant purchased on 1st July 2012 for ₹ 1,80,000 was sold for ₹ 1,10,000. On 1st December 2014, another plant was purchased for ₹ 3,00,000.
Prepare Plant Account, Provision for Depreciation Account and Plant Disposal Account.
Answer:
| Plant Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |||
| 2011 | 2012 | |||||||
| Sept. 01 | Bank A/c (P1) | 10,20,000 | Mar. 31 | Balance c/d | 10,20,000 | |||
| 10,20,000 | 10,20,000 | |||||||
| 2012 | 2013 | |||||||
| Apr. 01 | Balance b/d | 10,20,000 | Mar. 31 | Balance c/d | ||||
| July 01 | Bank A/c |
P 1
|
10,20,000 | |||||
|
P2
|
1,80,000 |
P 2
|
1,80,000 | |||||
|
P3
|
4,20,000 | 6,00,000 |
P 3
|
4,20,000 | 16,20,000 | |||
| 16,20,000 | 16,20,000 | |||||||
| 2013 | 2014 | |||||||
| Apr. 01 | Balance b/d | Mar. 31 | Balance c/d | 16,20,000 | ||||
|
P 1
|
10,20,000 |
P 1
|
10,20,000 | |||||
|
P 2
|
1,80,000 |
P 2
|
1,80,000 | |||||
|
P 3
|
4,20,000 | 16,20,000 |
P 3
|
4,20,000 | 16,20,000 | |||
| 16,20,000 | 16,20,000 | |||||||
| 2014 | 2014 | |||||||
| Apr. 01 | Balance b/d | Oct. 01 | Plant Disposal A/c (P2) | 1,80,000 | ||||
|
P 1
|
10,20,000 | 2015 | ||||||
|
P 2
|
1,80,000 | Mar. 31 | Balance c/d | |||||
|
P 3
|
4,20,000 | 16,20,000 |
P 1
|
10,20,000 | ||||
| Dec. 01 | Bank A/c (M4) | 3,00,000 |
P 3
|
4,20,000 | ||||
|
P 4
|
3,00,000 | 17,40,000 | ||||||
| 19,20,000 | 19,20,000 | |||||||
| Plant Disposal A/c | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |
| 2014 | 2014 | |||||
| Oct. 01 | Plant A/c | 1,80,000 | Oct. 01 | Provision for Depreciation A/c |
40,500 | |
| Bank A/c (Sale of P2) | 1,10,000 | |||||
| Profit and Loss A/c (Loss on Sale of P2) |
29,500 | |||||
| 1,80,000 | 1,80,000 | |||||
| Provision for Depreciation Account | |||||||
| Dr. | Cr. | ||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | ||
| 2012 | 2012 | ||||||
| Mar. 31 | Balance c/d | 59,500 | Mar.31 | Depreciation A/c (for 7 months) | 59,500 | ||
| 59,500 | 59,500 | ||||||
| 2013 | 2012 | ||||||
| Mar. 31 | Balance c/d | 2,06,500 | Apr.01 | Balance b/d | 59,500 | ||
| 2013 | |||||||
| Mar.31 | Depreciation A/c | ||||||
|
P1
|
1,02,000 | ||||||
|
P2 (for 9 months)
|
13,500 | ||||||
|
P3 (for 9 months)
|
31,500 | 1,47,000 | |||||
| 2,06,500 | 2,06,500 | ||||||
| 2014 | 2013 | ||||||
| Mar. 31 | Balance c/d | 3,68,500 | Apr.01 | Balance b/d | 2,06,500 | ||
| 2014 | |||||||
| Mar.31 | Depreciation A/c | ||||||
|
P1
|
1,02,000 | ||||||
|
P2
|
18,000 | ||||||
|
P3
|
42,000 | 1,62,000 | |||||
| 3,68,500 | 3,68,500 | ||||||
| 2014 | 2014 | ||||||
| Oct.01 | Plant Disposal A/c (P2) (13,500 + 18,000 + 9,000) |
40,500 | Apr.01 | Balance b/d | 3,68,500 | ||
| 2015 | Oct.01 | Depreciation A/c (P2) (for 6 months) | 9,000 | ||||
| Mar. 31 | Balance c/d | 4,91,000 | 2015 | ||||
| Mar.31 | Depreciation A/c | ||||||
|
P1
|
1,02,000 | ||||||
|
P3
|
42,000 | ||||||
|
P4 (for 4 months)
|
10,000 | 1,54,000 | |||||
| 5,31,500 | 5,31,500 | ||||||
Working Note: Calculation of Profit & Loss on Sale of P2
| Particulars | Amount |
| Value of Plant on July 01, 2012 | 1,80,000 |
|
Less: Depreciation @ 10% for 9 months
|
13,500 |
| Value of Plant on Apr. 01, 2013 | 1,66,500 |
|
Less: Depreciation @ 10%
|
18,000 |
| Value of Plant on Apr. 01, 2014 | 1,48,500 |
|
Less: Depreciation @ 10% for 6 months
|
9,000 |
| Value of Plant on Oct. 01, 2014 | 1,39,500 |
|
Less: Sale Value
|
1,10,000 |
| Loss on Sale | 29,500 |
Note: In order to make easy calculation, plant purchased on July 01, 2012 has been divided into two parts i.e. P2 and P3.
Thus, P2: Rs 1,80,000 (sold for Rs 1,10,000 on Oct. 01, 2014)
P3: Rs 4,20,000
Page No 16.62:
Question 33:
On 1st June, 2010, Kedarnath Ltd. purchased a machinery for ₹ 27,00,000. Depreciation is provided @ 10% p.a. on diminishing balance method and the books are closed on 31st March each year. On 1st October, 2012, a part of the machinery purchased on 1st June, 2010 for ₹ 6,00,000 was sold for ₹ 3,50,000 and on the same date another machinery was purchased for ₹ 8,00,000. You are required to show (i) Machinery A/c, (ii) Provision for Dep. A/c, and (iii) Machinery Disposal A/c.
Answer:
| Machinery Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |||
| 2010 | 2011 | |||||||
| June 01 | Bank A/c | Mar. 31 | Balance c/d | |||||
|
M1
|
6,00,000 |
M1
|
6,00,000 | |||||
|
M2
|
21,00,000 | 27,00,000 |
M2
|
21,00,000 | 27,00,000 | |||
| 27,00,000 | 27,00,000 | |||||||
| 2011 | 2012 | |||||||
| Apr. 01 | Balance b/d | Mar. 31 | Balance c/d | |||||
|
M1
|
6,00,000 |
M1
|
6,00,000 | |||||
|
M2
|
21,00,000 | 27,00,000 |
M2
|
21,00,000 | 27,00,000 | |||
| 27,00,000 | 27,00,000 | |||||||
| 2012 | 2012 | |||||||
| Mar. 31 | Balance b/d | Oct. 01 | Machinery Disposal A/c (M1) | 6,00,000 | ||||
|
M1
|
6,00,000 | 2013 | ||||||
|
M2
|
21,00,000 | 27,00,000 | Mar. 31 | Balance c/d | ||||
| Oct. 01 | Bank A/c (M3) | 8,00,000 |
M2
|
21,00,000 | ||||
|
M3
|
8,00,000 | 29,00,000 | ||||||
| 35,00,000 | 35,00,000 | |||||||
| Machinery Disposal A/c | ||||||
| Dr. |
Cr.
|
|||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |
| 2012 | 2012 | |||||
| Oct. 01 | Machinery A/c | 6,00,000 | Oct. 01 | Provision for Depreciation A/c | 1,29,750 | |
| Bank A/c (Sale of M1) | 3,50,000 | |||||
| Profit and Loss A/c (Loss on Sale of M1) | 1,20,250 | |||||
| 6,00,000 | 6,00,000 | |||||
| Provision for Depreciation Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |
| 2011 | 2011 | |||||
| Mar. 31 | Balance c/d | 2,25,000 | Mar. 31 | Balance b/d | ||
|
M1(for 10 months)
|
50,000 | |||||
|
M2 (for 10 months)
|
1,75,000 | 2,25,000 | ||||
| 2,25,000 | 2,25,000 | |||||
| 2012 | 2011 | |||||
| Mar. 31 | Balance c/d | 4,72,500 | Apr. 01 | Balance b/d | 2,25,000 | |
| 2012 | ||||||
| Mar. 31 | Depreciation A/c | |||||
|
M1
|
55,000 | |||||
|
M2
|
1,92,500 | 2,47,500 | ||||
| 4,72,500 | 4,72,500 | |||||
| 2012 | 2012 | |||||
| Oct. 01 | Machine Disposal A/c (M1) (50,000 + 55,000 + 24,750) |
1,29,750 | Apr. 01 | Balance b/d | 4,72,500 | |
| 2013 | Oct. 01 | Depreciation (M1) | 24,750 | |||
| Mar. 31 | Balance c/d | 5,80,750 | 2013 | |||
| Mar. 31 | Depreciation A/c (M1) (for 6 months) | |||||
|
M2
|
1,73,250 | |||||
|
M3 (for 6 months)
|
40,000 | 2,13,250 | ||||
| 7,10,500 | 7,10,500 | |||||
Working Note: Calculation of Profit & Loss on Sale of M1
| Particulars | Amount |
| Value of Machinery on June 01, 2010 | 6,00,000 |
|
Less: Depreciation @ 10% for 10 months
|
50,000 |
| Value of Machinery on Apr. 01, 2011 | 5,50,000 |
|
Less: Depreciation @ 10%
|
55,000 |
| Value of Machinery on Apr. 01, 2012 | 4,95,000 |
|
Less: Depreciation @ 10% for 6 months
|
24,750 |
| Value of Machinery on Oct. 01, 2012 | 4,70,250 |
|
Less: Sale Value
|
3,50,000 |
| Loss on Sale | 1,20,250 |
Note: In order to make easy calculation, machinery purchased on June 01, 2010 has been divided into two parts i.e. M1 and M2.
Thus, M1: Rs 6,00,000 (sold for Rs 3,50,000 on Oct. 01, 2012)
M2: Rs 21,00,000
Page No 16.62:
Question 34:
On 1st Jan. 2012, Panjim Dryfruits Ltd. bought a plant for ₹ 15,00,000. The company writes off depreciation @ 20% p.a. on Written Down Value Method and closes its books on 31st March every year. On 1st Oct. 2014, a part of the plant purchased on 1st Jan. 2012 for ₹ 3,00,000 was sold for ₹ 1,75,000. On 1st Jan. 2015 a fresh plant was purchased for ₹ 5,00,000. Prepare Plant A/c, Provision for Dep. A/c and Plant Disposal A/c.
Answer:
| Plant Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |||
| 2012 | 2012 | |||||||
| Jan. 01 | Bank A/c | Mar. 31 | Balance c/d | |||||
|
P1
|
3,00,000 |
P1
|
3,00,000 | |||||
|
P2
|
12,00,000 | 15,00,000 |
P2
|
12,00,000 | 15,00,000 | |||
| 15,00,000 | 15,00,000 | |||||||
| 2012 | 2013 | |||||||
| Apr. 01 | Balance b/d | Mar. 31 | Balance c/d | |||||
|
P1
|
3,00,000 |
P1
|
3,00,000 | |||||
|
P2
|
12,00,000 | 15,00,000 |
P2
|
12,00,000 | 15,00,000 | |||
| 15,00,000 | 15,00,000 | |||||||
| 2013 | 2014 | |||||||
| Apr. 01 | Balance b/d | Mar. 31 | Balance c/d | |||||
|
P1
|
3,00,000 |
P1
|
3,00,000 | |||||
|
P2
|
12,00,000 | 15,00,000 |
P2
|
12,00,000 | 15,00,000 | |||
| 15,00,000 | 15,00,000 | |||||||
| 2014 | 2014 | |||||||
| Apr. 01 | Balance b/d | Oct. 01 | Plant Disposal A/c (P1) | 3,00,000 | ||||
|
P1
|
3,00,000 | 2015 | ||||||
|
P2
|
12,00,000 | 15,00,000 | Mar. 31 | Balance c/d | ||||
| 2015 |
P2
|
12,00,000 | ||||||
| Jan. 01 | Bank A/c (P3) | 5,00,000 |
P3
|
5,00,000 | 17,00,000 | |||
| 20,00,000 | 20,00,000 | |||||||
| Plant Disposal A/c | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |
| 2014 | 2014 | |||||
| Oct. 01 | Plant A/c | 3,00,000 | Oct. 01 | Provision for Depreciation A/c | 1,35,840 | |
| Profit and Loss A/c (Profit on Sale of P1) |
10,840 | Bank A/c (Sale of P1) | 1,75,000 | |||
| 3,10,840 | 3,10,840 | |||||
| Provision for Depreciation Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (Rs) | Date | Particulars | Amount (Rs) | |||
| 2012 | 2012 | |||||||
| Mar. 31 | Balance c/d | 75,000 | Mar. 31 | Depreciation A/c | ||||
|
P1 (for 3 months)
|
15,000 | |||||||
|
P2 (for 3 months)
|
60,000 | 75,000 | ||||||
| 75,000 | 75,000 | |||||||
| 2013 | 2012 | |||||||
| Mar. 31 | Balance c/d | 3,60,000 | Apr. 01 | Balance b/d | 75,000 | |||
| 2013 | ||||||||
| Mar. 31 | Depreciation A/c | |||||||
|
P1
|
57,000 | |||||||
|
P2
|
2,28,000 | 2,85,000 | ||||||
| 3,60,000 | 3,60,000 | |||||||
| 2014 | 2013 | |||||||
| Mar. 31 | Balance c/d | 5,88,000 | Apr. 01 | Balance b/d | 3,60,000 | |||
| 2014 | ||||||||
| Mar. 31 | Depreciation A/c | |||||||
|
P1
|
45,600 | |||||||
|
P2
|
1,82,400 | 2,28,000 | ||||||
| 5,88,000 | 5,88,000 | |||||||
| 2014 | 2014 | |||||||
| Oct. 01 | Plant Disposal A/c (P1) (15,000+57,000+45,600+18,240) | 1,35,840 | Apr. 01 | Balance b/d | 5,88,000 | |||
| 2015 | Oct. 01 | Depreciation A/c (M1) (for 6 months) | 18,240 | |||||
| Mar. 31 | Balance c/d | 6,41,320 | 2015 | |||||
| Mar. 31 | Depreciation A/c | |||||||
|
21
|
1,45,920 | |||||||
|
P 3 (for 3 months)
|
25,000 | 1,70,920 | ||||||
| 7,77,160 | 7,77,160 | |||||||
Working Notes: Calculation of Profit & Loss on Sale of P1
| Particulars | Amount |
| Value of Plant on Jan. 01, 2012 | 3,00,000 |
|
Less: Depreciation for 3 months
|
15,000 |
| Value of Plant on Apr. 01, 2012 | 2,85,000 |
|
Less: Depreciation
|
57,000 |
| Value of Plant on Apr. 01, 2013 | 2,28,000 |
|
Less: Depreciation
|
45,600 |
| Value of Plant on Apr. 01, 2014 | 1,82,400 |
|
Less: Depreciation for 3 months
|
18,240 |
| Value of Plant on Oct. 01, 2014 | 1,64,160 |
|
Less: Sale Value
|
1,75,000 |
| Profit on Sale | 10,840 |
Note: In order to make easy calculation, plant purchased on Jan 01, 2012 has been divided into two parts i.e. P1 and P2.
Thus, P1: Rs 3,00,000 (sold for Rs 1,75,000 on Oct. 01, 2014)
P2: Rs 12,00,000
Page No 16.62:
Question 35:
The following balances appear in the books of M/s Amrit:
| ₹ | ||
| 1st April, 2018 | Machinery A/c | 60,000 |
| 1st April, 2018 | Provision for depreciation A/c | 36,000 |
On 1st April, 2018, they decided to dispose off a machinery for ₹ 8,400 which was purchased on 1st April, 2014 for ₹ 16,000.
You are required to prepare Machinery A/c, Provision for Depreciation A/c and Machinery Disposal A/c for 2018-19. Depreciation was charged at 10% p.a on original cost method.
Answer:
| Machinery Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) | |
| 2018 | 2018 | |||||
| Apr. 01 | Balance b/d | 60,000 | Apr. 01 | Machinery Disposal A/c | 16,000 | |
| 2019 | ||||||
| Mar. 31 | Balance c/d | 44,000 | ||||
| 60,000 | 60,000 | |||||
| Provision for Depreciation Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) | |
| 2018 | 2018 | |||||
| Apr. 01 | Machinery Disposal A/c (1,600 × 4) |
6,400 | Apr. 01 | Balance b/d | 36,000 | |
| 2019 | 2019 | |||||
| Mar. 31 | Balance c/d | 34,000 | Mar. 31 | Depreciation A/c (WN2) | 4,400 | |
| 40,400 | 40,400 | |||||
| Machinery Disposal Account | ||||||
| Dr. | Cr. | |||||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) | |
| 2018 | 2018 | |||||
| Apr. 01 | Machinery A/c | 16,000 | Apr. 01 | Provision for Depreciation A/c | 6,400 | |
| Apr. 01 | Bank A/c (Sale) | 8,400 | ||||
| Apr. 01 | Profit and Loss A/c (Loss on Sale) |
1,200 | ||||
| 16,000 | 16,000 | |||||
Working Notes:
WN1: Calculation of Profit & Loss on Sale
| Particulars | Amount |
| Value of Furniture on Apr. 01, 2014 | 16,000 |
|
Less: Depreciation for 4 years @ 10% p.a.
|
6,400 |
| Value of Furniture on Apr. 01, 2018 | 9,600 |
|
Less: Sale Value
|
8,400 |
| Loss on Sale | 1,200 |
WN2: Calculation of Depreciation on remaining value of Machinery
Page No 16.62:
Question 36:
A limited company purchased on 01-01-2017 a plant for ₹ 38,000 and spent ₹ 2,000 for carriage and brokerage. On 01-04-2018 it purchased additional plant costing ₹ 20,000. On 01-08-2019 the plant purchased on 01-01-2017 was sold for ₹ 25,000. On the same date, the plant purchased on 01-04-2018 was sold at a profit of ₹ 2,800. Depreciation is provided @10% per annum on diminishing balance method every year. Accounts are closed on 31st December every year. Show the plant A/c for 3 years.
Answer:
| Plant Account | ||||||||
| Dr. | Cr. | |||||||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) | |||
| 2017 | 2017 | |||||||
| Jan. 01 | Bank A/c (P1) (38,000 + 2,000) | 40,000 | Dec. 31 | Depreciation A/c | 4,000 | |||
| Balance c/d | 36,000 | |||||||
| 40,000 | 40,000 | |||||||
| 2018 | 2018 | |||||||
| Jan. 01 | Balance b/d | 36,000 | Dec. 31 | Depreciation A/c | ||||
| Apr .01 | Bank A/c (P2) | 20,000 |
P1
|
3,600 | ||||
|
P2 (for 9 months)
|
1,500 | 5,100 | ||||||
| Dec. 31 | Balance c/d | |||||||
|
P1
|
32,400 | |||||||
|
P2
|
18,500 | 50,900 | ||||||
| 56,000 | 56,000 | |||||||
| 2019 | 2019 | |||||||
| Jan. 01 | Balance b/d | Aug. 01 | Depreciation A/c (P1) | 1,890 | ||||
|
P1
|
32,400 | Bank A/c (Sale of P1) | 25,000 | |||||
|
P2
|
18,500 | 50,900 | Profit and Loss A/c (Loss on Sale of P1) | 5,510 | ||||
| Aug. 01 | Profit and Loss A/c (Profit on Sale of P2) | 2,800 | Aug. 01 | Depreciation A/c (P2) | 1,080 | |||
| Bank A/c (Sale of P2) | 20,220 | |||||||
| 53,700 | 53,700 | |||||||
Working Notes:
WN1: Calculation of Profit & Loss on Sale of P1
| Particulars | Amount |
| Value of Plant on Apr. 01, 2019 | 32,400 |
|
Less: Depreciation for 7 months
|
1,890 |
| Value of Plant on Aug. 01, 2019 | 30,510 |
|
Less: Sale Value
|
25,000 |
| Loss on Sale | 5,510 |
WN2: Calculation of Sale Price of P2
| Particulars | Amount |
| Value of Plant on Apr. 01, 2019 | 18,500 |
|
Less: Depreciation for 7 months
|
1,080 |
| Value of Plant on Aug. 01, 2019 | 17,420 |
|
Add: Profit on Sale
|
2,800 |
| Sale Value | 20,220 |
Page No 16.63:
Question 37:
A Limited purchased a machine on 1st July 2011 for ₹ 3,00,000 and on 1st January 2013 bought another machinery for ₹ 2,00,000. On 1st August 2013 machine bought in 2011 was sold for ₹ 1,60,000. Another machine was bought for ₹ 1,50,000 on 1st October 2013. It was decided to provide depreciation @ 10% p.a. on written down value method assuming books are closed on 31st March each year. Prepare Machinery Account and Provision for depreciation account for 3 years.
Answer:
|
Machinery Account |
||||||||
|
Dr. |
Cr. |
|||||||
|
Date |
Particulars |
Amount (Rs) |
Date |
Particulars |
Amount (Rs) |
|||
|
2011 |
|
|
2012 |
|
|
|||
|
Jul. 01 |
Bank A/c (M1) |
3,00,000 |
Mar. 31 |
Balance c/d |
3,00,000 |
|||
|
|
|
|
|
|
|
|||
|
|
|
3,00,000 |
|
|
3,00,000 |
|||
|
2012 |
|
|
2013 |
|
|
|||
|
Apr. 01 |
Balance b/d |
3,00,000 |
Mar. 31 |
Balance c/d |
|
|||
|
2013 |
|
|
|
M1 |
3,00,000 |
|
||
|
Jan.01 |
Bank A/c (M2) |
2,00,000 |
|
M2 |
2,00,000 |
5,00,000 |
||
|
|
|
5,00,000 |
|
|
5,00,000 |
|||
|
2013 |
|
|
2013 |
|
|
|||
|
Apr. 01 |
Balance b/d |
5,00,000 |
Aug.01 |
Provision for Depreciation A/c |
58,575 |
|||
|
|
M1 |
3,00,000 |
|
|
Bank A/c (Sale of M1) |
1,60,000 |
||
|
|
M2 |
2,00,000 |
|
|
Profit and Loss A/c (Loss on Sale) |
81,425 |
||
|
|
|
|
2014 |
|
|
|||
|
Oct.01 |
Bank A/c (M3) |
1,50,000 |
Mar.31 |
Balance c/d |
|
|||
|
|
|
|
|
M2 |
2,00,000 |
|
||
|
|
|
|
|
M3 |
1,50,000 |
3,50,000 |
||
|
|
|
6,50,000 |
|
|
6,50,000 |
|||
|
|
|
|
|
|
|
|||
Working Notes: Calculation of Profit or Loss on Sale
|
Particulars |
Amount |
|
Value of M1 as on July 01, 2011 |
3,00,000 |
|
Less: Depreciation |
58,575 |
|
Value of M1 as on Aug. 01, 2013 |
2,41,425 |
|
Less: Sale Value |
1,60,000 |
|
Loss on Sale |
81,425 |
|
|
|
|
Provision for Depreciation Account |
||||||||
|
Dr. |
Cr. |
|||||||
|
Date |
Particulars |
Amount (Rs) |
Date |
Particulars |
Amount (Rs) |
|||
|
2012 |
|
|
2012 |
|
|
|||
|
Mar. 31 |
Balance c/d |
22,500 |
Mar. 31 |
Depreciation A/c |
22,500 |
|||
|
|
|
22,500 |
|
|
22,500 |
|||
|
2013 |
|
|
2012 |
|
|
|||
|
Mar. 31 |
Balance c/d |
|
Apr.01 |
Balance b/d |
22,500 |
|||
|
|
M1 |
50,250 |
|
2013 |
|
|
||
|
|
M2 |
5,000 |
55,250 |
Mar.31 |
Depreciation A/c |
|
||
|
|
|
|
|
M1 |
27,750 |
|
||
|
|
|
|
|
M2 |
5,000 |
32,750 |
||
|
|
|
55,250 |
|
|
55,250 |
|||
|
2013 |
|
|
2013 |
|
|
|||
|
Aug.01 |
Machinery A/c |
58,575 |
Apr.01 |
Balance b/d |
|
|||
|
2014 |
|
|
|
M1 |
50,250 |
|
||
|
Mar. 31 |
Balance c/d |
|
|
M2 |
5,000 |
55,250 |
||
|
|
M2 |
24,500 |
|
Aug.01 |
Depreciation A/c (M1) |
8,325 |
||
|
|
M3 |
7,500 |
32,000 |
2014 |
|
|
||
|
|
|
|
Mar.31 |
Depreciation A/c |
|
|||
|
|
|
|
|
M2 |
19,500 |
|
||
|
|
|
|
|
M3 |
7,500 |
27,000 |
||
|
|
|
90,575 |
|
|
90,575 |
|||
|
|
|
|
|
|
|
|||
Page No 16.63:
Question 38:
On April 01, 2010 Jain & Sons purchased a second hand plant costing ₹ 2,00,000 and spent ₹ 10,000 on its overhauling. It also spent ₹ 5,000 on transportation and installation of the plant. It was decided to provide for depreciation @ 20% on written down value. The plant was destroyed by fire on Oct. 31, 2013 and an insurance claim of ₹ 50,000 was admitted by the insurance company. Prepare plant account assuming that the company closes its books on March 31, every year.
Answer:
|
Plant Account |
||||||
|
Dr. |
Cr. |
|||||
|
Date |
Particulars |
Amount (₹) |
Date |
Particulars |
Amount (₹) |
|
|
2010 |
|
|
2010 |
|
|
|
|
April.01 |
Bank A/c |
2,15,000 |
Mar.31 |
Depreciation A/c |
43,000 |
|
|
|
(2,00,000+10,000+5,000) |
|
Mar.31 |
Balance c/d |
1,72,000 |
|
|
|
|
2,15,000 |
|
|
2,15,000 |
|
|
2011 |
|
|
2011 |
|
|
|
|
April.01 |
Balance b/d |
1,72,000 |
Mar.31 |
Depreciation A/c |
34,400 |
|
|
|
|
|
Mar.31 |
Balance c/d |
1,37,600 |
|
|
|
|
1,72,000 |
|
|
1,72,000 |
|
|
2012 |
|
|
2012 |
|
|
|
|
April.01 |
Balance b/d |
1,37,600 |
Mar.31 |
Depreciation A/c |
27,520 |
|
|
|
|
|
Dec.31 |
Balance c/d |
1,10,080 |
|
|
|
|
1,37,600 |
|
|
1,37,600 |
|
|
2013 |
|
|
2013 |
|
|
|
|
April.01 |
Balance b/d |
1,10,080 |
Oct.31 |
Depreciation A/c |
12,843 |
|
|
|
|
|
Oct.31 |
Statement of profit & Loss (loss by fire) |
47,237 |
|
|
|
|
|
Oct.31 |
Insurance claim |
50,000 |
|
|
|
|
1,10,080 |
|
|
1,10,080 |
|
|
|
|
|
|
|
|
|
Working Notes: Calculation of Loss by fire
|
Particulars |
Amount |
|
Value of plant as on Apr. 01, 2013 |
1,10,080 |
|
Less: Depreciation for 7 months |
(12,843) |
|
Value of plant on Oct. 31, 2013 |
97,237 |
|
Less: insurance claim received |
50,000 |
|
Loss by fire transferred to P/L A/c |
47,237 |
View NCERT Solutions for all chapters of Class 13