TS Grewal Accountancy Class 11 Solution Chapter 11 Depreciation

Class 11 Accounts Chapter 11 Depreciation TS Grewal Solutions

Chapter 11 Depreciation TS Grewal Class 11 Solutions

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.

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.

Amount of Depreciation

5000 P.A.

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

For Furniture_2

Amount of Depreciation	=	9,500	-	500
Amount of Depreciation	=	10
	=	900 P.A.

For Furniture_3

Amount of Depreciation	=	8,400	-	400
Amount of Depreciation	=	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

Rs.12,500

(6 Months) 2

Rs.2,500

15,000

March 31

By Balance c/d

Rs.2,37,500

Rs.97,500

3,35,000

3,50,000

2015

2016

April 01

To Balance b/d

March 31

By Depreciation a/c

Rs.2,37,500

Rs.12,500

Rs.97,500

3,35,000

Rs.5,000

17,500

March 31

By Balance c/d

Rs.2,25,000

Rs.92,500

3,17,500

3,35,000

2016

April 01

To Balance b/d

Oct. 01

By Depreciation a/c

(For 6months)

6,250

Rs.2,25,000

Oct. 01

By Bank a/c -1

1,43,000

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

Rs.5,000

(6 months)3

Rs.5,000

10,000

March 31

By Balance c/d

Rs.87,500

Rs.1,95,000

2,82,500

5,17,500

2017

2018

April 01

To Balance b/d

March 31

By Depreciation a/c

Rs. 87,500

Rs.5,000

Rs.1,95,000

2,82,500

Rs.10,000

15,000

March 31

By Balance c/d

Rs.82,500

Rs.1,85,000

2,67,500

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
Amount of Depreciation	=	10
	=	1000 P.A.

(ii) The Net book value of the assets on 31^st 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 (1/3^rd 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
						(2/3^rdportion) 1		2,000
						2		2,000
						3		1,000		5,000
					March 31	By Balance c/d
						(2/3^rdportion) 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 1/3^rd 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
1^st Installment Excluding Interest paid on 30 June 2018 (6000-1000)	=	5000
2^nd 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
Amount of Depreciation	=	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