Read TS Grewal Accountancy Class 11 Solution Chapter 11 Depreciation 2023 2024. Students should study TS Grewal Solutions Class 11 Accountancy available on Studiestoday.com with solved questions and answers. These chapter-wise answers for Class 11 Accountancy have been prepared by expert teachers of Grade 11. These TS Grewal Class 11 Solutions have been designed as per the latest accountancy TS Grewal Book for Class 11 and if practiced thoroughly can help you to score good marks in standard 11 Accounts class tests and examinations.
Class 11 Accounts Chapter 11 Depreciation TS Grewal Solutions
TS Grewal Solutions for Chapter 11 Depreciation Class 11 Accounts have been provided below based on the latest TS Grewal Class 11 book. The answers have been prepared based on the latest 2023 2024 book for the current academic year. TS Grewal Solutions Class 11 will help students to improve their concepts and easily solve accountancy questions for Class 11. Class 11 Grewal solutions should be revised regularly as more practice will help you get a better rank and easily solve more questions.
Chapter 11 Depreciation TS Grewal Class 11 Solutions
Question 1:
Calculate the Rate of Depreciation under Straight Line Method (SLM) from the following:
Purchased a second-hand machine for Rs 96,000, spent Rs 24,000 on its cartage, repairs and installation, estimated useful life of machine 4 years. Estimated residual value Rs 72,000.
Answer 1:
Calculation of Rate of Depreciation by Straight line Method
Amount of Depreciation |
= |
Cost of Asset |
- |
Estimated Scrap Value |
Number of year of life of Asset |
Amount of Depreciation |
= |
1,20,000 |
- |
72,000 |
4 |
Rate of Depreciation |
= |
Amount of Depreciation |
× |
100 |
|
|||
Cost of Asset |
|
|||||||
Rate of Depreciation |
= |
12,000 |
× |
100 |
= |
10% P.A. |
||
1,20,000 |
||||||||
Point of Knowledge:-
Cost of Assets = Purchases Price of Machine + Repairs and installation Charge.
PAGE NO 14.48:
Question 2:
On 1st April, 2015, X Ltd. purchased a machine costing Rs 4, 00,000 and spent Rs 50,000 on its installation. The estimated life of the machinery is 10 years, after which its residual value will be Rs 50,000 only. Find the amount of annual depreciation according to the Fixed Instalment Method and prepare Machinery Account for t he first three years. The books are closed on 31st March every year.
Answer 2:
Book of X Ltd. Machinery Account |
|||||||
Dr. |
|
Cr. |
|||||
Date |
Particulars |
J.F. |
Amount (Rs) |
Date |
Particulars |
J.F. |
Amount (Rs) |
2015 |
|
|
|
2016 |
|
|
|
April 01 |
To Bank a/c |
|
4,50,000 |
Mar.31 |
By Depreciation a/c |
|
40,000 |
(Cost of Asset+ Expense) |
|
Mar.31 |
By Balance c/d |
|
4,10,000 |
||
|
|
|
4,50,000 |
|
|
|
4,50,000 |
2016 |
|
|
|
2017 |
|
|
|
April 01 |
To Balance b/d |
|
4,10,000 |
Mar.31 |
By Depreciation a/c |
|
40,000 |
|
|
|
|
Mar.31 |
By Balance c/d |
|
3,70,000 |
|
|
|
4,10,000 |
|
|
|
4,10,000 |
2017 |
|
|
|
2018 |
|
|
|
April 01 |
To Balance b/d |
|
3,70,000 |
Mar.31 |
By Depreciation |
|
40,000 |
|
|
|
|
Mar.31 |
By Balance c/d |
|
3,30,000 |
|
|
|
3,70,000 |
|
|
|
3,70,000 |
2018 |
|
|
|
|
|
|
|
April 01 |
To Balance b/d |
|
3,30,000 |
|
|
|
|
Point of Knowledge:-
Cost of Assets = Purchases Price of Machine + Repairs and installation Charge
= 4, 00,000+50,000
= 4, 50,000
Working Note:-
Calculation of Depreciation:-
Amount of Depreciation |
= |
Cost of Asset |
+ |
Installation Charge |
- |
Scrap Value |
Number of year of life of Asset |
Amount of Depreciation |
= |
4,00,000 |
+ |
50,000 |
- |
50,000 |
|||
10 |
|||||||||
= |
40,000 P.A. |
||||||||
PAGE NO 14.48:
Question 3:
On 1st April, 2014, Furniture costing Rs 55,000 was purchased. It is estimated that its life is 10 years at the end of which it will be sold for Rs 5,000. Additions are made on 1st April 2015 and 1st October, 2017 to the value of Rs 9,500 and Rs 8,400 (Residual values Rs 500 and Rs 400 respectively). Show the Furniture Account for the first four years, if Depreciation is written off according to the Straight Line Method.
Answer 3:
In the Books of..... Furniture Account |
|||||||||
Dr. |
|
Cr. |
|||||||
Date |
Particulars |
J.F. |
Amount (Rs) |
Date |
Particulars |
J.F. |
Amount (Rs) |
||
2014 |
|
|
|
2015 |
|
|
|
||
April 01 |
To Bank a/c -1 |
|
55,000 |
March 31 |
By Depreciation a/c -1 |
|
5,000 |
||
|
|
|
|
March 31 |
Balance c/d -1 |
|
50,000 |
||
|
|
|
55,000 |
|
|
|
55,000 |
||
2015 |
|
|
|
2016 |
|
|
|
||
April 01 |
To Balance b/d -1 |
|
50,000 |
March 31 |
By Depreciation a/c |
|
|
||
April 01 |
To Bank a/c -2 |
|
9,500 |
|
1 |
Rs.5,000 |
|
|
|
|
|
|
|
|
2 |
Rs.900 |
|
5,900 |
|
|
|
|
|
March 31 |
By Balance c/d |
|
|
||
|
|
|
|
|
1 |
Rs.45,000 |
|
|
|
|
|
|
|
|
2 |
Rs.8,600 |
|
53,600 |
|
|
|
|
59,500 |
|
|
|
59,500 |
||
2016 |
|
|
|
2017 |
|
|
|
||
April 01 |
To Balance b/d |
|
|
March 31 |
By Depreciation a/c |
|
|
||
|
1 |
Rs.45,000 |
|
|
|
1 |
Rs.5,000 |
|
|
|
2 |
Rs.8,600 |
|
53,600 |
|
2 |
Rs.900 |
|
5,900 |
|
|
|
|
March 31 |
By Balance c/d |
|
|
||
|
|
|
|
|
1 |
Rs.40,000 |
|
|
|
|
|
|
|
|
2 |
Rs.7,700 |
|
47,700 |
|
|
|
|
53,600 |
|
|
53,600 |
|||
2017 |
|
|
|
2018 |
|
|
|||
April 01 |
To Balance b/d |
|
|
March 31 |
By Depreciation a/c |
|
|
||
|
1 |
Rs.40,000 |
|
|
|
1 |
Rs.5,000 |
|
|
|
2 |
Rs.7,700 |
|
47,700 |
|
2 |
Rs.900 |
|
|
Oct. 01 |
To Bank a/c -3 |
|
8,400 |
|
3 |
Rs.400 |
|
6,300 |
|
|
|
|
|
|
|
|
|||
|
|
|
|
March 31 |
By Balance c/d |
|
|
||
|
|
|
|
|
1 |
Rs.35,000 |
|
|
|
|
|
|
|
|
2 |
Rs.6,800 |
|
|
|
|
|
|
|
|
3 |
Rs.8,000 |
|
49,800 |
|
|
|
|
56,100 |
|
|
56,100 |
|||
|
|
|
|
|
|
|
|
Working Notes:-
(1) Calculation of Depreciation
Amount of Depreciation |
= |
Cost of Asset |
- |
Scrap Value |
Number of year of life of Asset |
For Furniture_1
Amount of Depreciation |
= |
55,000 |
- |
5,000 |
||
10 |
||||||
= |
5000 P.A. |
|||||
For Furniture_2
Amount of Depreciation |
= |
9,500 |
- |
500 |
||
10 |
||||||
= |
900 P.A. |
|||||
For Furniture_3
Amount of Depreciation |
= |
8,400 |
- |
400 |
||
10 |
||||||
= |
800 P.A. |
|||||
Depreciation for Furniture_3 (for Six Months) |
= |
800× |
= |
400 |
PAGE NO 14.49:
Question 4:
On 1st April, 2014, A Ltd. purchased a machine for Rs 2, 40,000 and spent Rs 10,000 on its erection. On 1st October, 2014 an additional machinery costing Rs 1, 00,000 was purchased. On 1st October, 2016, the machine purchased on 1st April, 2014 was sold for Rs 1, 43,000 and on the same date, a new machine was purchased at cost of Rs 2, 00,000.
Answer 4:
Machinery Account
Dr. |
|
Cr. |
||||||||||
Date |
Particulars |
J.F. |
Amount (Rs) |
Date |
Particulars |
J.F. |
Amount (Rs) |
|||||
2014 |
|
|
|
2015 |
|
|
|
|||||
April 01 |
To Bank a/c -1 |
|
2,50,000 |
March 31 |
By Depreciation a/c |
|
|
|||||
Oct. 01 |
To Bank a/c -2 |
|
1,00,000 |
|
1 |
Rs.12,500 |
|
|
||||
|
|
|
|
|
(6 Months) 2 |
Rs.2,500 |
|
15,000 |
||||
|
|
|
|
March 31 |
By Balance c/d |
|
|
|||||
|
|
|
|
|
1 |
Rs.2,37,500 |
|
|
||||
|
|
|
|
|
2 |
Rs.97,500 |
|
3,35,000 |
||||
|
|
|
3,50,000 |
|
|
|
3,50,000 |
|||||
2015 |
|
|
|
2016 |
|
|
|
|||||
April 01 |
To Balance b/d |
|
|
March 31 |
By Depreciation a/c |
|
|
|||||
|
1 |
Rs.2,37,500 |
|
|
|
1 |
Rs.12,500 |
|
|
|||
|
2 |
Rs.97,500 |
|
3,35,000 |
|
2 |
Rs.5,000 |
|
17,500 |
|||
|
|
|
|
|
|
|
|
|||||
|
|
|
|
March 31 |
By Balance c/d |
|
|
|||||
|
|
|
|
|
1 |
Rs.2,25,000 |
|
|
||||
|
|
|
|
|
2 |
Rs.92,500 |
|
3,17,500 |
||||
|
|
|
3,35,000 |
|
|
|
3,35,000 |
|||||
2016 |
|
|
|
2016 |
|
|
|
|||||
April 01 |
To Balance b/d |
|
|
Oct. 01 |
By Depreciation a/c (For 6months) |
|
6,250 |
|||||
|
1 |
Rs.2,25,000 |
|
|
Oct. 01 |
By Bank a/c -1 |
|
1,43,000 |
||||
|
2 |
Rs.92,500 |
|
3,17,500 |
Oct. 01 |
By P&L a/c(loss on sale) |
|
75,750 |
||||
|
|
|
|
|
2017 |
|
|
|
||||
July 01 |
To Bank a/c -3 |
|
2,00,000 |
March 31 |
By Depreciation a/c |
|
|
|||||
|
|
|
|
|
2 |
Rs.5,000 |
|
|
||||
|
|
|
|
|
(6 months)3 |
Rs.5,000 |
|
10,000 |
||||
|
|
|
|
March 31 |
By Balance c/d |
|
|
|||||
|
|
|
|
|
2 |
Rs.87,500 |
|
|
||||
|
|
|
|
|
3 |
Rs.1,95,000 |
|
2,82,500 |
||||
|
|
|
5,17,500 |
|
|
|
5,17,500 |
|||||
2017 |
|
|
|
2018 |
|
|
|
|||||
April 01 |
To Balance b/d |
|
|
March 31 |
By Depreciation a/c |
|
|
|||||
|
2 |
Rs. 87,500 |
|
|
|
2 |
Rs.5,000 |
|
|
|||
|
3 |
Rs.1,95,000 |
|
2,82,500 |
|
3 |
Rs.10,000 |
|
15,000 |
|||
|
|
|
|
March 31 |
By Balance c/d |
|
|
|||||
|
|
|
|
|
2 |
Rs.82,500 |
|
|
||||
|
|
|
|
|
3 |
Rs.1,85,000 |
|
2,67,500 |
||||
|
|
|
2,82,500 |
|
|
|
2,82,500 |
|||||
|
|
|
|
|
|
|
|
|||||
Point of Knowledge:-
Cost of Assets = Purchases Price of Machine + Repairs and installation Charge
= 2, 40,000 + 10,000
= 2, 50,000
Working Notes:-
(1) Calculation of Deprecation
Amount of Depreciation |
= |
Cost of Asset |
× |
Rate of Depreciation |
|
For Machine_1
Amount of Depreciation |
= |
2,50,000 |
× |
5 |
= |
12,500 P.A. |
100 |
For Machine_2
Amount of Depreciation |
= |
1,00,000 |
× |
5 |
= |
5,000 P.A. |
100 |
For Machine_2 (Six Month)
Amount of Depreciation |
= |
1,00,000 |
× |
5 |
× |
6 |
= |
2,500 |
100 |
12 |
For Machine_3
Amount of Depreciation |
= |
2,00,000 |
× |
5 |
= |
10,000 P.A. |
100 |
(2) Calculation of Profit or Loss on sale of Machine -1
Particulars |
Amount (Rs.) |
Value of Machinery on 01 April,2016 |
2,25,000 |
(-) Total Depreciation on Machine 1 |
6,250 |
Value of Machinery on 01 Oct,2016 |
2,18,750 |
(-) Sales Price |
1,43,000 |
Loss on Sale of Machinery |
75,750 |
PAGE NO 14.49:
Question 5:
From the following transactions of a concern, prepare the Machinery Account for the ye-ar ended 31st March, 2018:
1st April, 2017 |
: |
Purchased a second-hand machinery for Rs 40,000 |
1st April, 2017 |
: |
Spent ₹ 10,000 on repairs for making it serviceable. |
30th September, 2017 |
: |
Purchased additional new machinery for Rs 20,000. |
31st December, 2017 |
: |
Repairs and renewals of machinery Rs 3,000. |
31st March, 2018 |
: |
Depreciate the machinery at 10% p.a. |
Answer 5:
Machinery Account |
|||||||||
Dr. |
|
Cr. |
|||||||
Date |
Particulars |
J.F. |
Amount (Rs) |
Date |
Particular |
J.F. |
Amount (Rs) |
||
2017 |
|
|
|
2018 |
|
|
|
||
Apr.01 |
To Bank a/c -1 |
|
50,000 |
Mar.31 |
By Depreciation a/c |
|
|
||
Sept 30 |
To Bank a/c -2 |
|
20,000 |
|
1 |
Rs.5,000 |
|
|
|
|
|
|
|
|
(6 months) 2 |
Rs.1,000 |
|
6,000 |
|
|
|
|
|
Mar.31 |
By Balance c/d |
|
|
||
|
|
|
|
|
1 |
Rs.45,000 |
|
|
|
|
|
|
|
|
(6 months) 2 |
Rs.19,000 |
|
64,000 |
|
|
|
|
70,000 |
|
|
|
70,000 |
||
|
|
|
|
|
|
|
|
||
Point of Knowledge:-
If the Repair & Renewal Charge made on same day, when the machinery was purchases then it should be added in the cost of machinery. But after purchasing date, expenses on machinery should not be recorded in the Machinery Account.
PAGE NO 14.49:
Question 6:
An asset was purchased for Rs 10,500 on 1st April, 2011. The scrap value was estimated to be Rs 500 at the end of asset's 10 years' life. Straight Line Method of depreciation was used. The accounting year ends on 31st March every year. The asset was sold for Rs 600 on 31st March, 2018. Calculate the following.
(i) The Depreciation expense for the year ended 31st March, 2012.
(ii) The net book value of the asset on 31st March, 2016.
(iii) The grain or loss on sale of the asset on 31st March, 2018.
Answer 6:
Asset Account |
|||||||
Dr. |
|
Cr. |
|||||
Date |
Particulars |
J.F. |
Amount (Rs) |
Date |
Particulars |
J.F. |
Amount (Rs) |
2011 |
|
|
|
2012 |
|
|
|
April 01 |
To Bank a/c |
|
10,500 |
Mar.31 |
By Depreciation a/c |
|
1,000 |
|
|
|
|
Mar.31 |
By Balance c/d |
|
9,500 |
|
|
|
10,500 |
|
|
|
10,500 |
2012 |
|
|
|
2013 |
|
|
|
April 01 |
To Balance b/d |
|
9,500 |
Mar.31 |
By Depreciation a/c |
|
1,000 |
|
|
|
|
Mar.31 |
By Balance c/d |
|
8,500 |
|
|
|
9,500 |
|
|
|
9,500 |
2013 |
|
|
|
2014 |
|
|
|
April 01 |
To Balance b/d |
|
8,500 |
Mar.31 |
By Depreciation a/c |
|
1,000 |
|
|
|
|
Mar.31 |
By Balance c/d a/c |
|
7,500 |
|
|
|
8,500 |
|
|
|
8,500 |
2014 |
|
|
|
2015 |
|
|
|
April 01 |
To Balance b/d |
|
7,500 |
Mar.31 |
By Depreciation a/c |
|
1,000 |
|
|
|
|
Mar.31 |
By Balance c/d |
|
6,500 |
|
|
|
7,500 |
|
|
|
7,500 |
2015 |
|
|
|
2016 |
|
|
|
April 01 |
To Balance b/d |
|
6,500 |
Mar.31 |
By Depreciation a/c |
|
1,000 |
|
|
|
|
Mar.31 |
By Balance c/d |
|
5,500 |
|
|
|
6,500 |
|
|
|
6,500 |
2016 |
|
|
|
2017 |
|
|
|
April 01 |
To Balance b/d |
|
5,500 |
Mar.31 |
By Depreciation a/c |
|
1,000 |
|
|
|
|
Mar.31 |
By Balance c/d |
|
4,500 |
|
|
|
5,500 |
|
|
|
5,500 |
2017 |
|
|
|
2018 |
|
|
|
April 01 |
To Balance b/d |
|
4,500 |
Mar.31 |
By Depreciation a/c |
|
1,000 |
|
|
|
|
Mar.31 |
By Bank a/c |
|
600 |
|
|
|
|
Mar.31 |
By P & L a/c (Loss) |
|
2,900 |
|
|
|
4,500 |
|
|
|
4,500 |
|
|
|
|
|
|
|
|
(i) Depreciation expense for the year ended 31st March, 2012
Amount of Depreciation |
= |
Cost of Asset |
- |
Scrap Value |
Number of year of life of Asset |
Amount of Depreciation |
= |
10,500 |
- |
500 |
||
10 |
||||||
= |
1000 P.A. |
|
||||
(ii) The Net book value of the assets on 31st March, 2016
Net Book Value = Cost Price – Depreciation till date
= Rs. 10,500 – (1,000×5)
= Rs. 5,500
(iii) Calculation of Profit or Loss on the sale of Asset.
Particulars |
Amount (Rs.) |
Value of Assets on 01 April,2017 |
10,500 |
(-) Total Depreciation (1000×7) |
7,000 |
Net Book value of Asset |
3,500 |
(-) Sales Price |
600 |
Loss on Sale of Machinery |
2,900 |
PAGE NO 14.49:
Question 7:
A Van was purchased on 1st April, 2015 for Rs 60,000 and Rs 5,000 was spent on its repair and Registration. On 1st October, 2016 another van was purchased for Rs 70,000. On 1st April, 2017, the first van purchased on 1st April, 2015 was sold for Rs 45,000 and a new van costing Rs 1, 70,000 was purchased on the same date. Show the Van Account from 2015-16 to 2017-18 on the basis of Straight Line Method, if the rate of Depreciation charged is 10% p.a. Assume that books are closed on 31st March every year.
Answer 7:
Van Account |
|||||||||||
Dr. |
|
Cr. |
|||||||||
Date |
Particulars |
J.F. |
Amount (Rs) |
Date |
Particulars |
J.F. |
Amount (Rs) |
||||
2015 |
|
|
|
2016 |
|
|
|
||||
April 01 |
To Bank a/c -1 |
|
65,000 |
March 31 |
By Depreciation a/c -1 |
|
6,500 |
||||
|
|
|
|
March 31 |
By Balance c/d |
|
58,500 |
||||
|
|
|
65,000 |
|
|
|
65,000 |
||||
2016 |
|
|
|
2017 |
|
|
|
||||
April 01 |
To Balance b/d -1 |
|
58,500 |
March 31 |
By Depreciation a/c |
|
|
||||
Oct. 01 |
To Bank a/c -2 |
|
70,000 |
|
1 |
6,500 |
|
|
|||
|
|
|
|
|
(6 month) 2 |
3,500 |
|
10,000 |
|||
|
|
|
|
March 31 |
By Balance c/d |
|
|
||||
|
|
|
|
|
1 |
52,000 |
|
|
|||
|
|
|
|
|
2 |
66,500 |
|
1,18,500 |
|||
|
|
|
1,28,500 |
|
|
|
1,28,500 |
||||
2017 |
|
|
|
2017 |
|
|
|
||||
April 01 |
To Balance b/d |
|
|
April 01 |
By Bank a/c -1 |
|
45,000 |
||||
|
1 |
52,000 |
|
|
April 01 |
By P & L a/c (Loss on Sale) |
|
7,000 |
|||
|
2 |
66,500 |
|
1,18,500 |
2018 |
|
|
|
|||
|
|
March 31 |
By Depreciation a/c |
|
|
||||||
April 01 |
To Bank a/c -3 |
|
1,70,000 |
|
2 |
7,000 |
|
|
|||
|
|
|
|
|
3 |
17,000 |
|
24,000 |
|||
|
|
|
|
March 31 |
By Balance c/d |
|
|
||||
|
|
|
|
|
2 |
59,500 |
|
|
|||
|
|
|
|
|
3 |
1,53,000 |
|
2,12,500 |
|||
|
|
|
2,88,500 |
|
|
|
2,88,500 |
||||
|
|
|
|
|
|
|
|
||||
Working Notes:-
(1) Calculation of Depreciation:-
Amount of Depreciation |
= |
Cost of Asset |
× |
Rate of Depreciation |
|
For VAN_1
Amount of Depreciation |
= |
65,000 |
× |
10 |
= |
6,500 P.A. |
100 |
For VAN_2
Amount of Depreciation |
= |
70,000 |
× |
10 |
= |
7,000 P.A. |
100 |
For VAN_2 (Six Month)
Amount of Depreciation |
= |
70,000 |
× |
10 |
× |
6 |
= |
Rs.3,500 |
100 |
12 |
For VAN_3
Amount of Depreciation |
= |
1,70,000 |
× |
10 |
= |
17,000 P.A. |
100 |
(2) Calculation of Profit and loss on sale of Van _1
|
|
||
Particulars |
Amount (Rs.) |
||
Value of Machinery on 01 April,2016 |
65,000 |
||
(-) Total Depreciation on Van 1 |
13,000 |
||
Value of Machinery on 01 April,2016 |
52,000 |
||
(-) Sales Price |
45,000 |
||
Loss on Sale of Machinery |
7,000 |
||
PAGE NO 14.50:
Question 8:
A company whose accounting year is a financial year, purchased on 1st July, 2014 machinery costing Rs 30,000.
It purchased further machinery on 1st January, 2015 costing Rs 20,000 and on 1st October, 2015 costing Rs 10,000.
On 1st April, 2016, one-third of the machinery installed on 1st July, 2014 became obsolete and was sold for Rs 3,000.
Show how Machinery Account would appear in the books of the company. It being given that machinery was depreciated by Fixed Instalment Method at 10% p.a. What would be the value of Machinery Account on 1st April, 2017?
Answer 8:
Machinery Account |
||||||||||
Dr. |
|
Cr. |
||||||||
Date |
Particulars |
J.F. |
Amount (Rs) |
Date |
Particulars |
J.F. |
Amount (Rs)s |
|||
2014 |
|
|
|
2015 |
|
|
|
|||
July 01 |
To Bank a/c -1 |
|
30,000 |
March 31 |
By Depreciation a/c |
|
|
|||
2015 |
|
|
|
|
|
|
||||
Jan. 01 |
To Bank a/c -2 |
|
20,000 |
|
(9 months) 1 |
2,250 |
|
|
||
|
|
|
|
|
2 |
500 |
|
2,750 |
||
|
|
|
|
March 31 |
By Balanced c/d |
|
|
|||
|
|
|
|
|
1 |
27,750 |
|
|
||
|
|
|
|
|
2 |
19,500 |
|
47,250 |
||
|
|
|
50,000 |
|
|
|
50,000 |
|||
2015 |
|
|
|
2016 |
|
|
|
|||
April01 |
To Balance b/d |
|
|
March 31 |
By Depreciation a/c |
|
|
|||
|
1 |
27,750 |
|
|
|
1 |
3,000 |
|
|
|
|
2 |
19,500 |
|
47,250 |
|
2 |
2,000 |
|
|
|
|
|
|
|
|
3 |
500 |
|
5,500 |
||
Oct. 01 |
To Bank a/c -3 |
|
10,000 |
March 31 |
By Balance c/d |
|
|
|||
|
|
|
|
|
1 |
24,750 |
|
|
||
|
|
|
|
|
2 |
17,500 |
|
|
||
|
|
|
|
|
3 |
9,500 |
|
51,750 |
||
|
|
|
57,250 |
|
|
|
57,250 |
|||
2016 |
|
|
|
2016 |
|
|
|
|||
April01 |
To Balance b/d |
|
|
April 01 |
By Bank a/c 1 (1/3rd portion) |
|
3,000 |
|||
|
1 |
24,750 |
|
|
April 01 |
By P&L a/c (Loss on Sale)-1 |
|
5,250 |
||
|
2 |
17,500 |
|
|
2017 |
|
|
|
||
|
3 |
9,500 |
|
51,750 |
March 31 |
By Depreciation a/c |
|
|
||
|
|
|
(2/3rdportion) 1 |
2,000 |
|
|
||||
|
|
|
|
|
2 |
2,000 |
|
|
||
|
|
|
|
|
3 |
1,000 |
|
5,000 |
||
|
|
|
|
March 31 |
By Balance c/d |
|
|
|||
|
|
|
|
|
(2/3rdportion) 1 |
14,500 |
|
|
||
|
|
|
|
|
2 |
15,500 |
|
|
||
|
|
|
|
|
3 |
8,500 |
|
38,500 |
||
|
|
|
51,750 |
|
|
|
51,750 |
|||
|
|
|
|
|
|
|
|
|||
Working Notes:-
1. Calculation of Depreciation
Amount of Depreciation |
= |
Cost of Asset |
× |
Rate of Depreciation |
|
Amount of Depreciation_ for Machinery 1
Amount of Depreciation |
= |
30,000 |
× |
10 |
= |
Rs. 3,000 P.A. |
100 |
Amount of Depreciation_ for Machinery 1 (For 9 Months)
Amount of Depreciation |
= |
30,000 |
× |
10 |
× |
9 |
= |
Rs. 2,250 |
100 |
12 |
Amount of Depreciation_ for Machinery 2
Amount of Depreciation |
= |
20,000 |
× |
10 |
= |
2,000 P.A. |
100 |
Amount of Depreciation_ for Machinery 3
Amount of Depreciation |
= |
10,000 |
× |
10 |
= |
1,000 P.A. |
100 |
(2) Calculation of Profit & Loss on sale of 1/3rd Part of Machine-1
Particulars |
Amount (Rs.) |
Value of Machinery on 01 April,2016 |
30,000 |
(-) Total Depreciation on Machinery 1 |
5,250 |
Value of Machinery on 01 April,2016 |
24,750 |
Value of 1/3rd Part of Machinery on 01 April,2016 (24,750×1/3) |
8,250 |
(-) Sales Price |
3,000 |
Loss on Sale of Machinery |
5,250 |
PAGE NO 14.50:
Question 9:
On 1st July, 2015, A Co. Ltd. purchases second-hand machinery for Rs 20,000 and spends Rs 3,000 on reconditioning and installing it. On 1st January, 2016, the firm purchases new machinery worth Rs 12,000. On 30th June, 2017, the machinery purchased on 1st January, 2016, was sold for Rs 8,000 and on 1st July, 2017, a fresh plant was installed. Payment for this plant was to be made as follows:
1st July, 2017 |
Rs 5,000 |
30th June, 2018 |
Rs 6,000 |
30th June, 2019 |
Rs 5,500 |
Payments in 2018 and 2019 include interest of Rs 1,000 and Rs 500 respectively.
The company writes off 10% p.a. on the original cost. The accounts are closed every year on 31st March. Show the Machinery Account for the year ended 31st March, 2018.
Answer 9:
Books of A. Co. Ltd
Machinery Account |
|||||||||
Dr. |
|
Cr. |
|||||||
Date |
Particulars |
J.F. |
Amount (Rs) |
Date |
Particulars |
J.F. |
Amount (Rs) |
||
2015 |
|
|
|
2016 |
|
|
|
||
July 01 |
To Bank a/c -1 |
|
23,000 |
Mar.31 |
By Depreciation a/c |
|
|
||
2016 |
|
|
|
|
(9 months) 1 |
1,725 |
|
|
|
Jan.01 |
To Bank a/c -2 |
|
12,000 |
|
(3 months) 2 |
300 |
|
2,025 |
|
|
|
|
|
Mar.31 |
By Balance c/d |
|
|
||
|
|
|
|
|
1 |
21,275 |
|
|
|
|
|
|
|
|
2 |
11,700 |
|
32,975 |
|
|
|
|
35,000 |
|
|
|
35,000 |
||
2016 |
|
|
|
2017 |
|
|
|
||
April 01 |
To Balance b/d |
|
|
Mar.31 |
By Depreciation a/c |
|
|
||
|
1 |
21,275 |
|
|
|
1 |
2,300 |
|
|
|
2 |
11,700 |
|
32,975 |
|
2 |
1,200 |
|
3,500 |
|
|
|
|
Mar.31 |
By Balance c/d |
|
|
||
|
|
|
|
|
1 |
18,975 |
|
|
|
|
|
|
|
|
2 |
10,500 |
|
29,475 |
|
|
|
|
32,975 |
|
|
|
32,975 |
||
2017 |
|
|
|
2017 |
|
|
|
||
April 01 |
To Balance b/d |
|
|
June 30 |
By Bank a/c -2 |
|
8,000 |
||
|
1 |
18,975 |
|
|
June 30 |
By Depreciation a/c -2 (3 months) |
|
300 |
|
|
2 |
10,500 |
|
29,475 |
June 30 |
By P&L a/c (Loss on Sale) |
|
2,200 |
|
July 01 |
To Bank a/c -3 |
|
5,000 |
2018 |
|
|
|
||
July 01 |
To Creditors a/c -3 |
|
10,000 |
Mar.31 |
By Depreciation a/c |
|
|
||
|
|
|
|
|
1 |
2,300 |
|
|
|
|
|
|
|
|
(9 months) 3 |
1,125 |
|
3,425 |
|
|
|
|
|
|
By Balance c/d |
|
|
||
|
|
|
|
|
1 |
16,675 |
|
|
|
|
|
|
|
|
3 |
13,875 |
|
30,550 |
|
|
|
|
44,475 |
|
|
|
44,475 |
||
|
|
|
|
|
|
|
|
Point of Knowledge:-
(1) Cost of Assets = Purchases Price of Machine + installation Charge
= 20,000 + 3,000
=Rs. 23,000
(2) Calculation of Creditors
Calculation of Creditors |
||
Total Value of New Machinery |
= |
15000 |
Less: Cash Payment |
= |
5000 |
Pending Amount of Machinery |
= |
10000 |
1st Installment Excluding Interest paid on 30 June 2018 (6000-1000) |
= |
5000 |
2nd Installment Excluding Interest paid on 30 June 2018 (5500-500) |
= |
5000 |
Working Notes:-
1. Calculation of Depreciation
Amount of Depreciation |
= |
Cost of Asset |
× |
Rate of Depreciation |
|
Amount of Depreciation_ for Machinery 1
Amount of Depreciation |
= |
23,000 |
× |
10 |
= |
Rs. 2,300 P.A. |
100 |
Depreciation on Machinery 1 for 9 Months
2300 |
× |
9 |
= |
Rs. 1725 |
12 |
Amount of Depreciation_ for Machinery 2
Amount of Depreciation |
= |
12,000 |
× |
10 |
= |
1,200 P.A. |
100 |
Depreciation on Machinery 2 for 3 Months
1,200 |
× |
3 |
= |
Rs. 300 |
12 |
Amount of Depreciation_ for Machinery 3
Amount of Depreciation |
= |
15,000 |
× |
10 |
= |
1,500 P.A. |
100 |
Depreciation on Machinery 3 for 9 Months
1,500 |
× |
9 |
= |
Rs. 1125 |
12 |
(2) Calculation of profit on loss on sale of Machine (2)
Particulars |
Amount (Rs.) |
Value of Machinery on 01 July,2015 |
12,000 |
(-) Total Depreciation on Machinery 2 |
1,800 |
Value of Machinery on 01 April,2017 |
10,200 |
(-) Sales Price |
8,000 |
Loss on Sale of Machinery |
2,200 |
PAGE NO 14.50:
Question 10:
On 1st April, 2015, Shivam Enterprise purchased second-hand machinery for Rs 52,000 and spent Rs 2,000 on cartage, Rs 3,000 on unloading, Rs 2,000 on installation and Rs 1,000 as brokerage of the middle man. It was estimated that the machinery will have a scrap value of Rs 6,000 at the end of its useful life, which is 10 years. On 31st December 2015, repairs and renewals amounted to Rs 2,500 were paid. On 1st October, 2017, this machine was sold for Rs 30,600 and an amount of Rs 600 was paid as commission to an agent. Calculate the amount of annual depreciation and rate of depreciation. Also prepare the Machinery Account for first 3 years, assuming that firm follows financial year for accounting.
Answer 10:
Calculation of Depreciation
Amount of Depreciation |
= |
Cost of Asset |
+ |
Installation Charge |
- |
Scrap Value |
Number of year of life of Asset |
Amount of Depreciation |
= |
60,000 |
+ |
0 |
- |
6,000 |
10 |
||||||
= |
5,400 |
Calculation of Rate of Depreciation
Rate of Depreciation |
= |
Amount of Depreciation |
× |
100 |
Cost of Asset |
Rate of Depreciation |
= |
5,400 |
× |
100 |
= |
9% |
60,000 |
Machinery Account |
||||||
Dr. |
Cr. |
|||||
Date |
Particulars |
Amount (Rs) |
Date |
Particulars |
Amount (Rs) |
|
2015 |
|
|
2016 |
|
|
|
Apr. 01 |
To Bank A/c |
60,000 |
Mar. 31 |
By Depreciation A/c |
5,400 |
|
|
|
|
Mar. 31 |
By Balance c/d |
54,600 |
|
|
|
60,000 |
|
|
60,000 |
|
2016 |
|
|
2017 |
|
|
|
Apr. 01 |
To Balance b/d |
54,600 |
Mar. 31 |
By Depreciation A/c |
5,400 |
|
|
|
|
Mar. 31 |
By Balance c/d |
49,200 |
|
|
|
|
|
|
|
|
|
|
54,600 |
|
|
54,600 |
|
2017 |
|
|
2017 |
|
|
|
Apr. 01 |
To Balance b/d |
49,200 |
Oct. 01 |
By Depreciation A/c (6 months) |
2,700 |
|
|
|
|
|
By Bank A/c (Sale) |
30,000 |
|
|
|
|
|
By P&L A/c (Loss on Sale) |
16,500 |
|
|
|
|
|
|
|
|
|
|
49,200 |
|
|
49,200 |
|
|
|
|
|
|
|
|
Working Notes:-
(1) Cost of Machinery: -
52,000+2,000+3,000+2,000+1,000 = Rs. 60,000/-
(2) Calculation of Profit or Loss on Sale
Particulars |
Amount (Rs.) |
Value of Machinery on 01 April,2015 |
60,000 |
(-) Total Depreciation on Machinery |
13,500 |
Value of Machinery on 01 Oct.,2017 |
46,500 |
(-) Sales Price |
30,000 |
Loss on Sale of Machinery |
16,500 |
Point of Knowledge:-
1. If the nature of Expense is recurring it will not be added to Machinery A/c.
2. All the expenses which incurred on the date of purchases will be added to cost of machine.
PAGE NO 14.51:
Question 11:
Modern Ltd. purchased a machinery on 1st August, 2015 for Rs 60,000. On 1st October, 2016, it purchased another machine for Rs 20,000 plus CGST and SGST @ 6% each. On 30th June, 2017, it sold the first machine purchased in 2015 for Rs 38,500 charging IGST @ 12%. Depreciation is provided @ 20% p.a. on the original cost each year. Accounts are closed on 31st March every year. Prepare the Machinery A/c for three years.
Answer 11:
Books of Modern Ltd. Machinery Account |
||||||||||
Dr. |
|
Cr. |
||||||||
Date |
Particulars |
J.F. |
Amount (Rs) |
Date |
Particulars |
J.F. |
Amount (Rs) |
|||
2015 |
|
|
|
2016 |
|
|
|
|||
Aug.01 |
To Bank a/c -1 |
|
60,000 |
March 31 |
By Depreciation a/c -1 (8 months) |
|
8,000 |
|||
|
|
|
|
March 31 |
Balance c/d |
|
52,000 |
|||
|
|
|
60,000 |
|
|
|
60,000 |
|||
2016 |
|
|
|
2017 |
|
|
|
|||
April 01 |
To Balance b/d |
|
52,000 |
March 31 |
By Depreciation a/c |
|
|
|||
Oct. 01 |
To Bank a/c -2 |
|
20,000 |
|
1 |
12,000 |
|
|
||
|
|
|
|
|
(6 months) 2 |
2,000 |
|
14,000 |
||
|
|
|
|
March 31 |
By Balance c/d |
|
|
|||
|
|
|
|
|
1 |
40,000 |
|
|
||
|
|
|
|
|
2 |
18,000 |
|
58,000 |
||
|
|
|
72,000 |
|
|
|
72,000 |
|||
2017 |
|
|
|
2017 |
|
|
|
|||
April 01 |
To Balance b/d |
|
|
June 30 |
By Depreciation a/c -1 (3 months) |
|
3,000 |
|||
|
1 |
40,000 |
|
|
June 30 |
By Bank a/c -1 |
|
38,500 |
||
|
2 |
18,000 |
|
58,000 |
2018 |
|
|
|
||
June 30 |
To P&L a/c (profit) |
|
1,500 |
Mar.31 |
By Depreciation a/c -2 |
|
4,000 |
|||
|
|
|
|
Mar.31 |
By Balance c/d |
|
14,000 |
|||
|
|
|
59,500 |
|
|
|
59,500 |
|||
|
|
|
|
|
|
|
|
|||
Working Notes:-
(1). Calculation of Depreciation
Amount of Depreciation |
= |
Cost of Asset |
× |
Rate of Depreciation |
|
Amount of Depreciation for Machinery 1
Amount of Depreciation |
= |
60,000 |
× |
20 |
= |
12,000 P.A. |
100 |
Depreciation on Machinery 1 for 8 Months
12000 |
× |
8 |
= |
Rs. 8,000 |
12 |
Depreciation on Machinery 1 for 3 Months
12000 |
× |
3 |
= |
Rs. 3,000 |
12 |
Amount of Depreciation_ for Machinery 2
Amount of Depreciation |
= |
20,000 |
× |
20 |
= |
4,000 P.A. |
100 |
Depreciation on Machinery 1 for 6 Months
4000 |
× |
6 |
= |
Rs. 8,000 |
12 |
(2). Calculation of Profit or Loss on Sale
Particulars |
Amount (Rs.) |
Value of Machinery on 01 April,2015 |
60,000 |
(-) Total Depreciation on Machinery |
23,000 |
Value of Machinery on 01 Oct.,2017 |
37,000 |
(-) Sales Price |
38,500 |
Profit on Sale of Machinery |
1,500 |
Total Depreciation = 8,000 + 12,000 + 3,000 = 23,000
(3). Journal entries for purchase and sale.
Journal |
|
|||||
Date |
Particulars |
L.F. |
Debit Amount (Rs) |
Credit Amount (Rs) |
|
|
2016 |
|
|
|
|
|
|
Oct 01 |
Machinery A/c Dr. |
20,000 |
|
|||
|
Input CGST A/c Dr. |
1,200 |
|
|||
|
Input SGST A/c Dr. |
1,200 |
|
|||
|
To Bank A/c |
|
|
22,400 |
||
|
(Being Purchased Machinery, CGST & SGST @ 6% paid) |
|
|
|
||
|
|
|
|
|
||
2017 |
|
|
|
|
||
Jun 30 |
Bank A/c Dr. |
43,120 |
|
|||
|
To Machinery A/c |
|
|
38,500 |
||
|
To Output IGST A/c |
|
|
4,620 |
||
|
(Being Machinery sold & IGST @ 12% charged) |
|
|
|
|
|
|
|
|
|
|
|
|
PAGE NO 14.51:
Question 12:
On 1st July, 2015, Sohan Lal & Sons purchased a plant costing Rs 60,000. Additonal plant was purchased on 1st January, 2016 for Rs 40,000 and on 1st October, 2016, for Rs 20,000, paying CGST and SGST @ 6% each. On 1st April, 2017, one-third of the plant purchased on 1st July, 2015, was found to have become obsolete and was sold for Rs 6,000, charging CGST and SGST @ 6% each.
Prepare the Plant Account for the first three years in the books of Sohan Lal & Sons. Depreciation is charged @ 10% p.a. on Straight Line Method. Accounts are closed on 31st March each year.
Answer 12:
Books of Sohan Lal & Sons Plant Account |
|||||||||
Dr. |
|
Cr. |
|||||||
Date |
Particulars |
J.F. |
Amount (Rs) |
Date |
Particulars |
J.F. |
Amount (Rs) |
||
2015 |
|