Question No 23 Chapter No 12 – D.K Goal 11 Class

Question No 23 Chapter No 12 D K Goal

23. A company purchased second-hand machinery on 1st May, 2009 for 5,85,000 and immediately spent 15,000 on its erection. On 1st October, 2010, it purchased another machine for 4,00,000. On 31st July, 2011, it sold off the first machine for 2,50,000 and bought another for 4,20,000. On 1st November, 2012, the second machine was also sold off for 3,00,000. Depreciation was provided on the machinery @ 15% p.a. on Equal Instalment Method.
Show the Machinery Account, Depreciation Account and Provision for Depreciation Account assuming that the books are closed on 31st March every year.

The solution of Question No 23 Chapter No 12 D K Goal: –

Dr.	Machinery A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
1stMay.2009	To Bank A/c (5,85,000+ 15,000)		6,00,000
				31st Mar 2010	By Balance C/d		6,00,000
			6,00,000				6,00,000
1st Apr.2010	To Balance b/f		6,00,000
1st Oct.2010	To Bank A/c		4,00,000	31st Mar 2011	By Balance C/d		10,00,000
			10,00,000				10,00,000
1st Apr.2011	To Balance b/f		10,00,000	1st Jul.2011	By Provision for Depreciation A/c		2,02,500
30stJul.2011	To Bank A/c		4,20,000	1st Jul.2011	By Bank A/c (Sale)		2,50,000
				1st Jul.2011	By Profit & Loss A/c		1,47,500
				31st Mar 2012	By Balance C/d(4,00,000 + 4,20,000)		8,20,000
			14,20,000				14,20,000
1st Apr.2012	To Balance b/f		8,20,000	1st Nov.2012	By Provision for Depreciation A/c		1,25,000
1stNov.2012	To Profit and Loss A/c		25,000	1st Nov.2012	By Bank A/c (Sale)		3,00,000
				31st Mar 2015	By Balance C/d(1,60,000 + 2,00,000)		4,20,000
			8,45,000				8,45,000

Dr.	Depreciation A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
31stMar2010	To Provision for Depreciation A/c		82,500
				31st Mar 2010	By Profit & Loss A/c		82,500
			82,500				82,500
31stMar.2011	To Provision for Depreciation A/c		1,20,000
				31st Mar 2011	By Profit & Loss A/c		1,20,000
			1,20,000				1,20,000
1st Apr.2012	To Provision for Depreciation A/c		1,32,000
				31st Mar 2012	By Profit & Loss A/c		1,32,000
			1,32,000				1,32,000
1st Apr.2013	To Balance b/f		98,000
				31st Mar 2013	By Profit & Loss A/c		98,000
			98,000				98,000

Dr.	Provision for Depreciation  A/c						Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
				31st Mar 2010	By Depreciation A/c (11 Months)		82,500
31stMar.2010	Balance c/d		82,500
			82,500				82,500
				31st Apr 2010	By Balance b/d		82,500
31stMar.2012	Balance c/d		2,02,500	31st Mar 2012	By Depreciation A/c (90,000 + 30,000)		1,20,000
			2,02,500				2,02,500
31st Jul.2011	To Machinery A/c (82,500 + 90,000 + 30,000)		2,02,500	31st Apr 2011	By Balance b/d		2,02,500
				1st Jul.2011	By Depreciation A/c (3 Months)		30,000
1st Apr.2014	To Balance b/f		1,32,000	31st Mar.2012	By Depreciation A/c (60,000 + 42,000)		1,02,000
			2,03,500				2,03,500
1st Jan.2013	To Machinery A/c(30,000 + 60,000 + 35,000)		1,25,000	31st Apr 2012	By Balance b/d		1,32,000
				31st Nov.2012	By Depreciation A/c(7 months)		35,000
1st Apr.2013	To Balance b/f		1,05,000	31st Mar.2013	By Depreciation A/c (24,000 + 7,500)		63,000
			2,30,000				2,30,000

Working Note of Question No 23 Chapter No 12 D K Goal:
Calculation of Profit or Loss on Sale Machinery 1

Statement Showing profit or loss on the sale of Machinery
Particulars	Amount
Machinery Purchase on of Equipment as on 1st May. 2009	6,00,000
Less: – Amount of Depreciation charged on the year 2009-10
6,00,000 *15%* 6/12	82,000
Amount of Depreciation charged on the year 2010-11
6,00,000 *15%* 12/12	90,000
Amount of Depreciation charged on the year 2011-12
6,00,000 *15%* 4/12	30,000
Book value of asset as on 30st Jul, 2011	3,97,500
Sale Price of Machinery	2,50,000
Loss on the sale of the asset	1,47,500

Calculation of Profit & Loss on Sale of Machinery 2

Statement Showing profit or loss on the sale of Machinery
Particulars	Amount
Machinery Purchase on of Equipment as on 1st Oct. 2010	4,00,000
Less: – Amount of Depreciation charged on the year 2010-11
4,00,000 *15%* 6/12	30,000
Amount of Depreciation charged on the year 2011-12
4,00,000 *15%* 12/12	60,000
Amount of Depreciation charged on the year 2012-13
4,00,000 *15%* 7/12	35,000
Book value of asset as of 1st Nov 2012	2,75,000
Sale Price of Machinery	3,00,000
Profit on the sale of the asset	25,000

Note: In order to make easy calculations, machinery purchased on July 01, 2015, has been divided into three parts i.e. M1, M2, and M3.
Thus,
M1: Rs 80,000 (sold for Rs 50,000 on Apr. 01, 2017)
M2: Rs 80,000 (sold for Rs 40,000 on Jan. 01, 2019)
M3: Rs 1,60,000 (includes the cost of 2 machines)

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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)
• Chapter 7 Books of Original Entry – Cash Book 
• 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.