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प्रश्न
Shubhangi Trading Company of Dombivli purchased Machinery for ₹ 86,000 on 1st January 2016 and immediately spent ₹ 4,000 on its fixation and erection. On 1st October 2016 additional Machinery costing ₹ 40,000 was purchased.
On 1st October 2017, the Machinery purchased on 1st January 2016 became obsolete and was sold for ₹ 70,000. On 1st July 2017, a new Machine was also purchased for ₹ 45,000.
Depreciation was provided annually on 31st March at the rate of 12% per annum on the fixed installment method.
Prepare Machinery Account for three years and pass Journal Entries for the Third year i.e. 2017-2018.
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उत्तर
| In the books of Shubhangi Trading company, Dombivli | |||||||
| Dr. | Machinery Account | Cr. | |||||
| Date | Particular | J.F. | Amt ₹ | Date | Particular | J.F. | Amt ₹ |
| 2016 | 2016 | ||||||
| Jan. 1 | To Cash/Bank A/c | 90,000 | Mar. 31 | By Depreciation A/c | 2,700 | ||
| (86,000 + 4,000) | Mar. 31 | By Balance c/d | 87,300 | ||||
| 90,000 | 90,000 | ||||||
| 2016 | 2017 | ||||||
| Apr. 1 | To Balance b/d | 87,300 | Mar. 31 | By Depreciation A/c (10,800 + 2400) | 13,200 | ||
| Oct. 1 | To Cash/Bank A/c | 40,000 | Mar. 31 | By Balance c/d | 1,14,100 | ||
| 1,27,300 | 1,27,300 | ||||||
| 2017 | 2017 | ||||||
| Apr. 1 | To Balance b/d | 1,14,100 | Oct. 1 | By Cash/Bank A/c | 70,000 | ||
| Jul. 1 | To Cash/Bank A/c | 45,000 | Oct. 1 | By Depreciation A/c | 5,400 | ||
| Oct. 1 | By Profit and Loss A/c (Loss on sale) | 1,100 | |||||
| 2017 | |||||||
| Mar. 31 | By Depreciation A/c (4,800 + 4,050) | 8,850 | |||||
| Mar. 31 | By Balance c/d | 73,750 | |||||
| 1,59,100 | 1,59,100 | ||||||
| 2018 | |||||||
| Apr. 1 | To Balance b/d | 73,750 | |||||
| Journal of Shubhangi Trading Company | ||||
| Date | Particulars | L.F. | Debit ₹ | Credit ₹ |
| 2017 July. 1 | Machinery A/c ...Dr. | 45,000 | ||
| To Cash/Bank A/c | 45,000 | |||
| (Being purchase of machinery) | ||||
| Oct. 1 | Cash/Bank A/c ...Dr. | 70,000 | ||
| To Machinery A/c | 70,000 | |||
| (Being machinery sold) | ||||
| Oct. 1 | Depreciation A/c ...Dr. | 5,400 | ||
| To Machinery A/c | 5,400 | |||
| (Being depreciation charged on the machinery sold) | ||||
| Oct. 1 | Profit and Loss A/c ...Dr. | 1,100 | ||
| To Machinery A/c | 1,100 | |||
| (Being loss on sale of machinery transferred to P&L A/c) | ||||
| 2018 Mar. 31 | Depreciation A/c ...Dr. | 8,850 | ||
| To Machinery A/c | 8,850 | |||
| (Being depreciation charged at the end of the year) | ||||
| Mar. 31 | Profit and Loss A/c ...Dr. | 14,250 | ||
| To Depreciation A/c | 14,250 | |||
| (Being balance in Depreciation A/c transferred to P&L A/c) | ||||
| Total ₹ | 1,44,600 | 1,44,600 | ||
Working Note:
Calculation of Profit or loss on sale of machine:
Original cost on 01 Jan 2016 = ₹ 90,000
Less: Depreciation for 2015-16 (3 months)
`90,000 xx 12/100 xx 3/12` = ₹ 2,700
W.D.V. on 01 Apr 2016 = ₹ 90,000 − ₹ 2,700 = ₹ 87,300
Less: Depreciation for 2016-17 (12 months)
`90,000 xx 12/100` = ₹ 10,800
W.D.V. on 01 Apr 2016 = ₹ 76,500
Less: Depreciation for 2017-18 (6 months)
`90,000 xx 12/100 xx 6/12` = ₹ 5,400
Depreciation = `40,000 xx 12/100 = 4800`
1st july 2017 to 31 march 2018 (45,000 9 month)
`45,000 xx 12/100 xx 9/12 = 4050`
W.D.V. on date of sale = 71,100
Less: Selling price = 70,000
∴ Loss on sale of machine = ₹ 1,100
APPEARS IN
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