Advertisements
Advertisements
प्रश्न
Sameer & Company, Mumbai purchased a Machine worth ₹ 2,00,000 on 1st April 2016. On 1st July 2017, the company purchased an additional Machine for ₹ 40,000.
On 31st March 2019, the company sold the Machine purchased on 1st July 2017 for ₹ 35,000. The company writes off depreciation at the rate of 10% on the original cost and the books of accounts are closed every year on 31st March.
Show the Machinery Account and Depreciation Account for the first three years ending 31st March 2016-17, 2017-18 and 2018-19
Advertisements
उत्तर
In the books of Sameer & Company, Mumbai
| Dr. | Machinery Account | Cr. | |||||
| Date | Particulars | J.F. | Amt ₹ | Date | Particulars | J.F. | Amt ₹ |
| 2016 | 2017 | ||||||
| Apr. 1 | To Cash/Bank A/c | 2,00,000 | Mar. 31 | By Depreciation A/c | 20,000 | ||
| Mar. 31 | By Balance c/d | 1,80,000 | |||||
| 2,00,000 | 2,00,000 | ||||||
| 2017 | 2018 | ||||||
| Apr. 1 | To Balance b/d | 1,80,000 | Mar. 31 | By Depreciation A/c (20,000 + 3,000) | 23,000 | ||
| Jul. 1 | To Cash/Bank A/c | 40,000 | By Balance c/d | 1,97,000 | |||
| 2,20,000 | 2,20,000 | ||||||
| 2018 | 2019 | ||||||
| Apr. 1 | To Balance b/d | 1,97,000 | Mar. 31 | By Cash/Bank A/c | 35,000 | ||
| 2019 | Mar. 31 | By Depreciation A/c (4,000 + 20,000) |
24,000 | ||||
| Mar. 31 | To Profit and Loss A/c (Profit on sale) | 2,000 | Mar. 31 | By Balance c/d | 1,40,000 | ||
| 1,99,000 | 1,99,000 | ||||||
| 2019 | |||||||
| Apr. 1 | To Balance b/d | 1,40,000 | |||||
| Dr. | Depreciation Account | Cr. | |||||
| Date | Particulars | J.F. | Amt ₹ | Date | Particulars | J.F. | Amt ₹ |
| 2017 | 2017 | ||||||
| Mar. 31 | To Machinery A/c | 20,000 | Mar. 31 | By Profit and Loss A/c | 20,000 | ||
| 20,000 | 20,000 | ||||||
| 2018 | 2018 | ||||||
| Mar. 31 | To Machinery A/c | 23,000 | Mar. 31 | By Profit and Loss A/c | 23,000 | ||
| 23,000 | 23,000 | ||||||
| 2019 | 2019 | ||||||
| Mar. 1 | To Machinery A/c | 24,000 | Mar. 31 | By Profit and Loss A/c | 24,000 | ||
| 24,000 | 24,000 | ||||||
Working note:
Calculation of Profit or Loss on sale of machine:
Original cost on 01.07.2017 = ₹ 40,000
Less: Depreciation for 2017-18 (9 months) = ₹ 3,000
W.D.V. on 01-04-2018 = ₹ 37,000
Less: Depreciation for 2018-19 (12. months) = ₹ 4,000
W.D.V. on date of sale = ₹ 33,000
Less: Selling price = ₹ 35,000
∴ Profit on sale of machine = ₹ 2,000
APPEARS IN
संबंधित प्रश्न
Answer in One Sentence only:
What is a ‘Scrap Value’ of an asset?
Answer in One Sentence only:
Which account is credited when depreciation is charged?
Write the word/term/phrase which can substitute the following statement:
The method of depreciation in which the total depreciation is equally spread over the life of the asset.
Write the word/term/phrase which can substitute the following statement:
The type of asset on which depreciation is charged.
Select the most appropriate answer from the alternatives given below and rewrite the sentence:
The amount that a fixed asset is expected to realise on its disposal is known as ______
Select the most appropriate answer from the alternatives given below and rewrite the sentence:
The amount of depreciation reduces year after year under ______
Complete the following sentence:
Depreciation is charged on ______ asset.
Complete the following sentence:
______ is the value which an asset realises at the end of its useful life.
Complete the following sentence:
Depreciation Account is a ______ account.
Under the written-down value method of depreciation, the amount of depreciation is ______.
If the rate of depreciation is the same, then the amount of depreciation under straight-line method vis-à-vis written down value method will be ______.
What is sinking fund method?
State the advantages of written down value method of depreciation.
A firm purchased a plant for ₹ 40,000. Erection charges amounted to ₹ 2,000. The effective life of the plant is 5 years. Calculate the amount of depreciation per year under the straight-line method.
A company purchased a building for ₹ 50,000. The useful life of the building is 10 years and the residual value is ₹ 5,000. Find out the amount and rate of depreciation under the straight-line method.
Machinery was purchased on 1st January 2015 for ₹ 4,00,000. ₹ 15,000 was spent on its erection and ₹ 10,000 on its freight charges. Depreciation is charged at 10% per annum on the straight-line method. The books are closed on 31st March each year. Calculate the amount of depreciation on machinery for the first two years.
From the following particulars, give journal entries for 2 years and prepare machinery account under straight-line method of providing depreciation:
Machinery was purchased on 1.1.2016
Price of the machine ₹ 36,000
Freight charges ₹ 2,500
Installation charges ₹ 1,500
Life of the machine 5 years
Ragul purchased machinery on April 1, 2014 for ₹ 2,00,000. On 1st October 2015, a new machine costing ₹ 1,20,000 was purchased. On 30th September 2016, the machinery purchased on April 1, 2014 was sold for ₹ 1,20,000. Books of accounts are closed on 31st March and depreciation is to be provided at 10% p.a. on straight line method. Prepare machinery account and depreciation account for the years 2014-15 to 2016-17.
Raj & Co purchased a machine on 1st January 2014 for ₹ 90,000. On 1st July 2014, they purchased another machine for ₹ 60,000. On 1st January 2015, they sold the machine purchased on 1st January 2014 for ₹ 40,000. It was decided that the machine be depreciated at 10% per annum on the diminishing balance method. Accounts are closed on 31st December every year. Show the machinery account for the years 2014 and 2015.
Correct the following statement and rewrite the statement.
Underwritten down value method depreciation is calculated on the original cost of an asset.
Mr. ‘X’ purchased Furniture on 1st October 2015 at ₹ 2,80,000 and spent ₹ 20,000 on its installation. He provides depreciation at 6% under the straight-line method on 31st March 2016. Calculate the amount of depreciation.
M/s Sitaram and Co Purchased a Machinery on 1st January 2016 for ₹ 2,00,000. The company provides depreciation @ 10% p.a. on Reducing Balance Method on 31st March every year. Calculate Written Down Value of Machinery as of 31st March 2017.
On 1st April 2015, Farid of Nasik purchased a Motor Car for ₹ 55,000. The scrap value of the Motor Car was estimated at ₹ 10,000 and its estimated life is 10 years. The Registration charge for the Motor Car was ₹ 5,000.
Show Motor Car Account for first four years, assuming that the books of accounts are closed on 31st March every year.
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.
On 1st April 2015, Farid of Nasik purchased a Motor Car for ₹ 55,000. The scrap value of the Motor Car was estimated at ₹ 10,000 and its estimated life is 10 years. The Registration charge for the Motor Car was ₹ 5,000.
Show Motor Car Account for first four years, assuming that the books of accounts are closed on 31st March every year.
Which of the following methods charges an equal amount of depreciation every year?
The Annuity Method is most suitable when:
A company uses a method that results in high depreciation expense initially and lower in later years. This pattern benefits them because:
