Question 25:
Following balances appear
in the books of M/s. Amrit as on 1st April, 2020:
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` |
2020 |
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|
1st April |
Machinery
A/c |
60,000 |
|
Provision
for Depreciation A/c |
36,000 |
On
1st April, 2020, they decided to dispose off a
machinery for ` 8,400 which was purchased on
1st April, 2016 for ` 16,000.
You are required to prepare the Machinery Account, Provision for Depreciation
Account and Machinery Disposal Account for the year ended 31st March, 2021.
Depreciation was charged at 10% p.a on Cost following
Straight Line Method.
Answer:
Books of M/s. Amrit Machinery Account |
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Dr. |
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Cr. |
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Date |
Particulars |
J.F. |
( `) |
Date |
Particulars |
J.F. |
( `) |
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2020 |
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|
2020 |
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April 01 |
Balance b/d (44,000 + 16,000) |
|
60,000 |
April 01 |
Machinery
Disposal |
|
16,000 |
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2021 |
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Mar.31 |
Balance c/d |
|
44,000 |
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60,000 |
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60,000 |
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Provision for Depreciation Account |
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Dr. |
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Cr. |
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Date |
Particulars |
J.F. |
( `) |
Date |
Particulars |
J.F. |
( `) |
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2020 |
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2020 |
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April 01 |
Machinery Disposal (4 years) |
|
6,400 |
April 01 |
Balance b/d |
|
36,000 |
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2021 |
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|
2021 |
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Mar.31 |
Balance c/d |
|
34,000 |
Mar.31 |
Depreciation (on
Machine costing Rs 44,000) |
|
4,400 |
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|
40,400 |
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|
40,000 |
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Machinery Disposal Account |
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Dr. |
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Cr. |
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Date |
Particulars |
J.F. |
( `) |
Date |
Particulars |
J.F. |
( `) |
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2020 |
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|
2020 |
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April 01 |
Machinery |
|
16,000 |
April 01 |
Provision for
Depreciation |
|
6,400 |
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2021 |
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Mar.31 |
Bank (Sale) |
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8,400 |
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Profit and Loss
(Loss) |
|
1,200 |
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16,000 |
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16,000 |
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Working Note
1. Calculation of
profit or loss on Machine Sold:
Particulars |
( `) |
Original Cost of
Machine Sold on April 01, 2020 |
16,000 |
Less:
Accumulated Depreciation on Machine Sold (1,600 × 4) |
(6,400) |
Book Value of
April 01, 2020 |
9,600 |
Less:
Sale Value |
(8,400) |
Loss on Sale |
1,200 |
Question 26:
Ashoka & Co. whose books are closed on 31st March,
purchased a machinery for ` 1,50,000 on 1st April, 2019,
Additional machinery was acquired for ` 50,000 on 1st October, 2019. Certain
machinery which was purchased for ` 50,000
on 1st October, 2019 was sold for ` 40,000 on 30th September, 2021.
Prepare the Machinery Account and Accumulated Depreciation Account for all the
years up to the year ended 31st March, 2022. Depreciation is charged @ 10% p.a.
on Straight Line Method. Also, show the Machinery Disposal Account.
Answer:
Books of Ashoka &
Co. Machinery Account |
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Dr. |
|
Cr. |
|||||||
Date |
Particulars |
J.F. |
( `) |
Date |
Particulars |
J.F. |
( `) |
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2019 |
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2020 |
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Apr.01 |
Bank (I) |
|
1,50,000 |
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Oct 01 |
Bank (II) |
|
50,000 |
Mar.31 |
Balance c/d |
|
2,00,000 |
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2,00,000 |
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2,00,000 |
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2020 |
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2021 |
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Apr.01 |
Balance b/d |
|
2,00,000 |
Mar.31 |
Balance c/d |
|
2,00,000 |
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2,00,000 |
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2,00,000 |
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2021 |
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2021 |
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Apr.01 |
Balance b/d |
|
2,00,000 |
Sep 30 |
Machinery Disposal A/c |
|
50,000 |
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2022 Mar.31, |
Balance c/d |
|
1,50,000 |
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2,00,000 |
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2,00,000 |
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Accumulated Depreciation Account |
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Dr. |
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Cr. |
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Date |
Particulars |
J.F. |
( `) |
Date |
Particulars |
J.F. |
( `) |
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2020 |
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2019 |
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Mar.31 |
Balance c/d |
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Mar. 31 |
Depreciation |
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I |
15,000 |
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I |
15,000 |
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II |
2,500 |
|
17,500 |
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II (for 6 months) |
2,500 |
|
17,500 |
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17,500 |
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17,500 |
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2021 |
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2020 |
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Mar.31 |
Balance c/d |
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Apr. 01 |
Balance b/d |
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I |
30,000 |
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I |
15,000 |
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II |
7,500 |
|
37,500 |
2021 |
II |
2,500 |
|
17,500 |
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Mar. 31 |
Depreciation |
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I |
15,000 |
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II |
5,000 |
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20,000 |
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37,500 |
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37,500 |
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2021 |
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2021 |
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Sep 30 |
Machinery disposal (II) |
|
10,000 |
Apr.
01 |
Balance b/d |
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Mar.31, 2022 |
Balance c/d (I) |
|
45,000 |
|
I |
30,000 |
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II |
7,500 |
|
37,500 |
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2021 Sep 30 |
Depreciation (II) |
|
2,500 |
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Mar. 31 |
Depreciation (I) |
|
15,000 |
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55,000 |
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55,000 |
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Machinery Disposal Account |
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Dr. |
|
Cr. |
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Date |
Particulars |
J.F. |
( `) |
Date |
Particulars |
J.F. |
( `) |
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2021 |
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|
2021 |
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Sep 30 |
Machinery A/c |
|
50,000 |
Sep
30 |
Accumulated Depreciation A/c |
|
10,000 |
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Sep
30 |
Bank A/c |
|
40,000 |
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|
50,000 |
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50,000 |
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Working note
1. Calculation of Profit or Loss on sale of Machine II
Particulars |
( `) |
Original Cost
Oct 01, 2021 |
50,000 |
Less:
Accumulated Depreciation |
(10,000) |
Book Value on
Sept 30, 2021 |
40,000 |
Less:
Sale Value |
(40,000) |
Profit / Loss |
NIL |
Question
27
On 1st April, 2014, Veeru Ltd. purchased a machinery for `2,50,000 and spent `50,0000 on its installation. On 1st July, 2016, 1/3rd of machinery purchased on 1st April, 2014 was sold for `15,000 and a new machinery at the cost of `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. (Delhi)
Answer
Machinery Account |
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Dr. |
|
Cr. |
|||||||
Date |
Particulars |
J.F. |
( `) |
Date |
Particulars |
J.F. |
( `) |
||
2014 |
|
|
|
2015 |
|
|
|
||
April
01 |
Bank A/c (M1) |
|
2,50,000 |
Mar.31 |
Balance C/d (M1) |
|
3,00,000 |
||
April
01 |
Bank A/c (M1) |
|
50,000 |
|
|
|
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|
3.00.000 |
3.00.000 |
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2015 |
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2016 |
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April
01 |
Balance B/d (M1) |
|
3,00,000 |
Mar.31 |
Balance C/d (M1) |
|
3,00,000 |
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3.00.000 |
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3.00.000 |
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2016 |
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2016 |
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April 31 |
Balance B/d (M1) |
|
3.00.000 |
July
01 |
Machinery Disposal A/c (M1) |
|
1,00,000 |
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2017 July
01 |
Bank A/c (M2) |
2,00,000 |
2017 |
|
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|||
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Mar.31 |
Balance c/d |
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|
||
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|
M1
– 2,00,000 |
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M2 – 2,00,000 |
|
4,00,000 |
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5,00,000 |
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5,00,000 |
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P
|
Provision for Depreciation on Machinery Account |
|
|||||||
Dr. |
|
Cr. |
|||||||
Date |
Particulars |
J.F. |
( `) |
Date |
Particulars |
J.F. |
( `) |
||
2015 |
|
|
|
2015 |
|
|
|
||
Mar.31 |
Balance c/d (M1) |
|
45,000 |
Mar.31 |
Depreciation A/c (M1) |
|
45,000 |
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|
45,000 |
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|
45,000 |
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2015 |
|
|
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April.01 |
Balance c/d (M1) |
|
45,000 |
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2016 |
|
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2016 |
|
|
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Mar.31 |
Balance c/d (M1) |
|
90,000 |
Mar.31 |
Depreciation A/c (M1) |
|
45,000 |
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|
90,000 |
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|
90,000 |
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2016 |
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2016 |
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July
01 |
Machinery Disposal A/c (M1) |
|
33,750 |
April.01 |
Balance c/d (M1) |
|
90,000 |
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Mar.31 |
Balance c/d |
|
|
2016 |
|
|
|
||
|
M1-
90,000 M1- 22,500 |
|
1,12,500 |
July.01 |
Depreciation A/c (On
1/3 Part of M1) |
|
3,750 |
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Mar.31 |
Depreciation A/c (On 2/3 of M1) 30,000 |
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M2- 22,500 |
|
52,500 |
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1,46,250 |
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1,46,250 |
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M
|
Machinery Disposal Account |
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|||||||
Dr. |
|
Cr. |
|||||||
Date |
Particulars |
J.F. |
( `) |
Date |
Particulars |
J.F. |
( `) |
||
2016 |
|
|
|
2016 |
|
|
|
||
July
01 |
Machinery A/c (M1) |
|
1,00,000 |
July
01 |
Provision for Depreciation on
Machinery A/c (M1) |
|
33,750 |
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|
|
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July
01 |
Bank
A/c (Sale) |
|
15,000 |
||
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July
01 |
Profit and loss A/c (Loss) |
|
51,250 |
||
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||
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|
1,00,000 |
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|
1,00,000 |
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Class : 11th | Ts Grewal solution 2022-2023
Chapter 15: Depreciation
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