Question No 20 Chapter No 12
20.On 1st April 2008, a Company purchased 6 machines for 50,000 each. Depreciation at the rate of 10% p.a. is charged on the Straight Line Method. The accounting year of the Company ends on 31st March and the depreciation is credited to a separate ‘Provision for Depreciation Account’.
On 1st October 2010, one machine was sold for 30,000 and on 1st April 2011, a second machine was sold for 24,000. You are required to prepare Machinery Account and Provision for Depreciation Account for four years ending 31st March 2012.
The solution of Question No 20 Chapter No 12: –
| Dr. | Machinery A/c | Cr. | |||||
| Date | Particulars |
J.F. | Amount | Date | Particulars |
J.F. | Amount |
| 1st Jul.2016 | To Bank A/c (50,000 + 50,000 + 2,00,000) | 3,00,000 | |||||
| 31st Mar 2017 | By Balance C/d | 3,00,000 | |||||
| 3,00,000 | 3,00,000 | ||||||
| 1st Apr.2017 | To Balance b/f | 3,00,000 | |||||
| 31st Mar 2018 | By Balance C/d |
3,00,000 | |||||
| 3,00,000 | 3,00,000 | ||||||
| 1st Apr.2018 | To Balance b/f | 6,00,000 | 1st Oct.2018 | By Provision for Depreciation A/c |
12,500 | ||
| 1st Oct.2018 | By Bank A/c (Sale) | 30,000 | |||||
| 1st Oct.2018 | By Profit & Loss A/c | 7,500 | |||||
| 31st Mar 2019 | By Balance C/d(50,000 +2,00,000) | 2,50,000 | |||||
| 3,00,000 | 3,00,000 | ||||||
| 1st Apr.2019 | To Balance b/f | 2,50,000 | 1st Apr.2019 | By Provision for Depreciation A/c |
15,000 | ||
| 1st Apr.2019 | By Bank A/c (Sale) | 24,000 | |||||
| 1st Apr.2019 | By Profit & Loss A/c | 11,000 | |||||
| 31st Mar 2020 | By Balance C/d(50,000 +2,00,000) | 2,00,000 |
|||||
| 2,50,000 |
2,50,000 |
||||||
| Dr. | Provision for Depreciation A/c | Cr. | |||||
| Date | Particulars |
J.F. | Amount | Date | Particulars |
J.F. | Amount |
| 31st Mar.2017 | By Depreciation A/c (5,000 + 5,000 + 20,000) | 30,000 | |||||
| 31stMar.2017 | Balance c/d | 30,000 | |||||
| 30,000 | 30,000 | ||||||
| 31st Apr 2017 | By Balance b/d | 30,000 | |||||
| 31stMar.2018 | Balance c/d | 60,000 | 31st Mar 2018 | By Depreciation A/c (5,000 + 5,000 + 20,000) | 30,000 | ||
| 60,000 | 60,000 | ||||||
| 1st Oct.2019 | To Balance b/f(5,000 + 5,000 + 2,500) | 12,500 | 31st Apr 2018 | By Balance b/d | 60,000 | ||
| 1st Oct.2019 | By Depreciation A/c (M1) | 2,500 | |||||
| 1st Apr.2018 | To Balance b/f | 75,000 | 1st Jan.2019 | By Depreciation A/c (for 10 months) |
25,000 | ||
| 87,500 | 87,500 | ||||||
| 1st Apr.2019 | To Balance b/f(5,000 + 5,000 + 5,000) | 15,000 | 1st Apr.2019 | By Balance b/d | 75,000 | ||
| 1st Apr.2019 | By Depreciation A/c | 20,000 | |||||
| 1st Apr.2020 | To Balance b/f | 80,000 |
|||||
| 95,000 |
95,000 |
||||||
Working Note:
Calculation of Profit or Loss on Sale M1
| Statement Showing profit or loss on the sale of Machinery | |
| Particulars |
Amount |
| Machinery Purchase on of Equipment as on 1st Apr. 2016 | 50,000 |
| Less: – Amount of Depreciation charged on the year 2016-17 | |
| 50,000 *10%* 12/12 | 5,000 |
| Amount of Depreciation charged on the year 2017-18 | |
| 50,000 *10%* 12/12 | 5,000 |
| Amount of Depreciation charged on the year 2018-19 | |
| 50,000 *10%* 12/12 | 2,500 |
| Book value of asset as on 1st Oct, 2018 | 37,500 |
| Sale Price of Machinery | 30,000 |
| Loss on the sale of the asset | 7,500 |
Calculation of Profit & Loss on Sale of M2
| Statement Showing profit or loss on the sale of Machinery | |
| Particulars |
Amount |
| Machinery Purchase on of Equipment as on 1st Apr. 2016 | 50,000 |
| Less: – Amount of Depreciation charged on the year 2016-17 | |
| 50,000 *10%* 12/12 | 5,000 |
| Amount of Depreciation charged on the year 2017-18 | |
| 50,000 *10%* 12/12 | 5,000 |
| Amount of Depreciation charged on the year 2018-19 | |
| 50,000 *10%* 12/12 | 5,000 |
| Book value of asset as on 1st Oct, 2018 | 35,000 |
| Sale Price of Machinery | 24,000 |
| Loss on the sale of the asset | 11,000 |
Note: For making calculation easy, Machinery purchased on April 01, 2008, has been divided into three i.e. M1, M2, and M3.
Thus,
M1: Rs 50,000 (sold for Rs 30,000 on Oct. 01, 2010)
M2: Rs 50,000 (sold for Rs 24,000 on Apr. 01, 2011)
M3: Rs 2,00,000 (includes the cost of 4 machines)
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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)
Check out the Accountancy Class +1 by D.K. Goal (Arya Publication) from their official Site.
