Question No 02 Chapter No 12
02.On 1st April, 2015, a Company bought Plant and Machinery costing 68,000. It is estimated that its working life is 10 years, at the end of which it will fetch 8,000. Additions are made on 1st April, 2016 to the value of 40,000 (Residual value 4,000). More additions are made on Oct. 1, 2017 to the value of 9,800 (Break up value 800). The working life of both the additional Plant and machinery is 20 years.
Show the Plant and Machinery account for the first four years, if depreciation is written off according to Straight Line Method. The accounts are closed on 31st March every year.
The solution of Question No 02 Chapter No 12: –
| Dr. | Machinery A/c | Cr. | |||||
| Dat | Particulars |
J.F. | Amount | Date | Particulars |
J.F. | Amount |
| 1st Apr.2015 | To Bank A/c (P1) | 68,000 | 31st Mar2016 | By Deprecation A/c | 6,000 | ||
| 31st Mar2016 | By Balance C/d | 62,000 | |||||
| 68,000 | 68,000 | ||||||
| 1st Apr 2016 | To Balance b/f | 62,000 | 31st Mar2017 | By Deprecation A/cP1 & P2(6,000 + 1,800) | 7,800 | ||
| 1st Apr 2016 | To Bank A/c (P2) | 40,000 | 31st Mar2017 | By Balance C/d |
94,000 |
||
| 1,02,000 | 1,02,000 | ||||||
| 1st Apr 2017 | To Balance b/f | 94,200 | 31st Mar2018 | By Deprecation A/cP1,P2 & P3(6,000 + 1,800+ 225) | 25,000 | ||
| 1st Oct 2017 | To Bank A/c (P3) | 9,800 | 31st Mar2018 | By Balance C/d | 95,975 |
||
| 1,04,000 |
1,04,000 | ||||||
Working Note:
Calculation of Depreciation
The method of calculating the Deprecation rate:
| Amount of Depreciation | = | Cost of assets- Estimated Realizable or Scrap value |
| Number of years of expected useful life |
P1 Cost of assets = Cost of Machine = 68,000
Number of years of expected useful life = 10 years
Estimated Retaliated or Scrap value = 8,000
| Amount of Depreciation | = | 68,000 -8,000 |
| 10 | ||
| = | 6,000 |
P2 Cost of assets = Cost of Machine = 40,000
Number of years of expected useful life = 10 years
Estimated Retaliated or Scrap value = 4,000
| Amount of Depreciation | = | 40,000 – 4,000 |
| 20 | ||
| = | 1,800 |
P3 Cost of assets = Cost of Machine = 9,800
Number of years of expected useful life = 10 years
Estimated Retaliated or Scrap value = 800
| Amount of Depreciation | = | 9,800 – 800 |
| 20 | ||
| = | 450 |
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Also, Check out the solved question of all Chapters: –
D K Goel – New ISC Accountancy -(Class 11 – ICSE)- Solution
- Chapter 1 Evolution of Accounting & Basic Accounting Terms
- Chapter 2 Accounting Equations
- Chapter 3 Meaning and Objectives of Accounting
- Chapter 4 Double Entry System
- Chapter 5 Books of Original Entry – Journal
- Chapter 6 Accounting for Goods and Service Tax (GST) (Coming soon)
- Chapter 7 Books of Original Entry – Cash Book (Coming soon)
- Chapter 8 Books of Original Entry – Special Purpose Subsidiary Books (Coming soon)
- Chapter 9 Ledger (Coming soon)
- Chapter 10 Trial Balance and Errors (Coming soon)
- Chapter 11 Bank Reconciliation Statement (Coming soon)
- Chapter 12 Depreciation (Coming soon)
- Chapter 13 Bills of Exchange (Coming soon)
- Chapter 14 Generally Accepted Accounting Principles(GAAP)
- Chapter 15 Bases of Accounting
- Chapter 16 Accounting Standards and International Financial Reporting Standard(IFRS) (Coming soon)
- Chapter 17 Capital and Revenue
- Chapter 18 Provisions and Reserves
- Chapter 19 Final Accounts (Coming soon)
- Chapter 20 Final Accounts – With Adjustments (Coming soon)
- Chapter 21 Errors and their Rectification (Coming soon)
- Chapter 22 Accounts from Incomplete Records – Single Entry System (Coming soon)
- Chapter 23 Accounts of Not-for-Profit Organisations (Coming soon)
- Chapter 24 Computerised Accounting System (Coming soon)
- Chapter 25 Introduction to Accounting Information System (Coming soon)
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