# TS Grewal Accountancy Class 11 Solution Chapter 11 Depreciation

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.

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.

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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.

 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.

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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.

 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

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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.

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

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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.

 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.

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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.

 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

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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.

 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

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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?

 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

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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.

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

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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.

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.

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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.

 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)

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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.