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On 1st April, 2014, Veeru Ltd. …

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On 1st April, 2014, Veeru Ltd. purchased a machinery for Rs. 2,50,000 and spent rs. 50,000 on its installation. On 1st July, 2016 1/3rd of machinery purchased on 1st April, 2014 was sold for Rs. 15,000 and a new machinery at the cost of Rs. 2,00,000 was purchased on the same date. The company has adopted the method of providing depreciation @ 15% p.a. on straight line method. Show the machinery account, provision for depreciation account and machinery disposal account for three years ended on 31st March, 2015 to 31st March, 2017.

Posted by Sejal Kotasthane 3 years, 1 month ago

CBSE > Class 11 > Accountancy

1 answers

Sia ? 3 years, 1 month ago

MACHINERY ACCOUNT

Dr.					Cr.
Date	Particulars	Amount ₹	Date	Particulars	Amount ₹
2014 April 1	To Bank A/c	2,50,000
April 1	To Bank A/c (Installation Exp.)	50,000	2015 Mar. 31	By Balance c/d	3,00,000
		3,00,000			3,00,000
2015 April 1	To Balance b/d	3,00,000	2016 Mar. 31	By Balance c/d	3,00,000
		3,00,000			3,00,000
2016 April 1	To Balance b/d	3,00,000	2016 July 1	By Machinery Disposal A/c	1,00,000
2016 July 1	To Bank A/c	2,00,000	2017 Mar. 31	By Balance c/d	4,00,000
		5,00,000			5,00,000

PROVISION FOR DEPRECIATION ACCOUNT

Dr.					Cr.
Date	Particulars	Amount ₹	Date	Particulars	Amount ₹
2015 Mar 31	To Balance c/d	45,000	2015 Mar. 31	By Depreciation A/c	45,000
		45,000			45,000
2016 Mar. 31	To Bank c/d	90,000	2015 April 1	By Balance b/d	45,000
			2016 Mar. 31	By Depreciation A/c	45,000
		90,000			90,000
2016 July 1	To Machinery Disposal A/c	33,750	2016 April 1	By Balance b/d	90,000
2017 Mar. 31	To Balance c/d	1,12,500	July 1	By Depreciation A/c	3,750
			Mar. 31	By Depreciation A/c	52,500
		1,46,250			1,46,250

MACHINERY DISPOSAL ACCOUNT

Dr.					Cr.
Date	Particulars	Amount ₹	Date	Particulars	Amount ₹
2016 July 1	To Machinery A/c	1,00,000	2016 July 1	By Provision for Depreciation A/c	33,750
			July 1	By Bank A/c	15,000
			July 1	By Statement of Profit & Loss (Loss on sale)	51,250
		1,00,000			1,00,000

Working Notes:

(1)	Calculation of loss on sale of machinery:	₹
	Original Cost of {tex}\frac{1}{3}{/tex}rd machinery as on 1st April, 2014	1,00,000
	Less : Depreciation @ 15% p.a. for 2 years 3 months on original cost method	33,750
	Book Value as on 1st July, 2016	66.250
	Less: Sale proceeds	15.000
	Loss on sale	51.250
(2)	Depreciation on unsold machinery for the year 2016-17 :
	On old machinery of ₹2,00,000 for 1 year	30.000
	On new machinery of ₹2,00,000 for 9 months	22.500
		52.500

Depreciation is charged @ 10% each year on origial value of asset each year i.e., same amount of depreciation charged each year.If some expenses are incur while purchasing asset the it is capitalised in value of asset.

ANSWER

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