# 11th | chapter:15 | Depreciation | Question No. 5 to 8 | Ts grewal Solution 2022-2023

#### Question 5:

On 1st April, 2018, furniture costing  ` 55,000 was purchased. It is estimated that its life is 10 years at the end of which it will be sold for  ` 5,000. Additions are made on 1st April 2019 and 1st October, 2021 to the value of  ` 9,500 and  ` 8,400 (Residual values  ` 500 and  ` 400 respectively). Show the Furniture Account for the first four years, if Depreciation is written off according to the Straight Line Method.

 Furniture Account Dr. Cr. Date Particulars J.F. ( `) Date Particulars J.F. ( `) 2018 2019 April 01 Bank (F1) 55,000 March 31 Depreciation (F1) 5,000 March 31 Balance c/d (F1) 50,000 55,000 55,000 2019 2020 April 01 Balance b/d (F1) 50,000 March 31 Depreciation April 01 Bank (F2) 9,500 F1 5,000 F2 900 5,900 March 31 Balance c/d F1 45,000 F2 8,600 53,600 59,500 59,500 2020 2021 April 01 Balance b/d March 31 Depreciation F1 45,000 F1 5,000 F2 8,600 53,600 F2 900 5,900 March 31 Balance c/d F1 40,000 F2 7,700 47,700 53,600 53,600 2021 2022 April 01 Balance b/d March 31 Depreciation F1 40,000 F1 5,000 F2 7,700 47,700 F2 900 Oct. 01 Bank (F3) 8,400 F3 400 6,300 March 31 Balance c/d F1 35,000 F2 6,800 F3 8,000 49,800 56,100 56,100

Working Notes:

Drepreciation on Furniture 1=55,000-5,000(Scrap Value)/10 Year=  `5,000 p.a.

Drepreciation on Furniture 2=9,500-500(Scrap Value)/10 Year=  `900 p.a.

Drepreciation on Furniture 3=8,400-400(Scrap Value)/10 Year=  `800 p.a.

Depreciation on Furniture(for 6 Month)=800×6/12= `400

#### Question 6:

From the following transactions of a concern, prepare the Machinery Account for the year ended 31st March, 2022:

 1st April, 2021 : Purchased a second-hand machinery for  ` 40,000 1st April, 2021 : Spent  ` 10,000 on repairs for making it serviceable. 30th September, 2021 : Purchased additional new machinery for  ` 20,000. 31st December, 2021 : Repairs and renewal of machinery  ` 3,000. 31st March, 2022 : Depreciate the machinery at 10% p.a.

 Machinery Account Dr. Cr. Date Particulars J.F. ( `) Date Particular J.F. ( `) 2021 2022 Apr.01 Bank (M1) 50,000 Mar.31 Depreciation Sept 30 Bank (M2) 20,000 M1 5,000 M2 (6 months) 1,000 6,000 Mar.31 Balance c/d M1 45,000 M2 (6 months) 19,000 64,000 70,000 70,000

Note:

Repair and renewal made on December 31, 2021 will not be recorded in Machinery Account because, this repair was made after putting the Machinery into use.

#### Question 7:

An asset was purchased for  ` 10,500 on 1st April, 2014. The scrap value was estimated to to be  ` 500 at the end of asset's 10 years' life. Straight Line Method of depreciation was used. The accounting year ends on 31st March every year. The asset was sold for  ` 600 on 31st March, 2021. Calculate the following.
(i) The Depreciation expense for the year ended 31st March, 2015.
(ii) The net book value of the asset on 31st March, 2019.
(iii) The gain or loss on sale of the asset on 31st March, 2021.

 Asset Account Dr. Cr. Date Particulars J.F. ( `) Date Particulars J.F. ( `) 2014 2015 April 01 Bank 10,500 Mar.31 Depreciation 1,000 Mar.31 Balance c/d 9,500 10,500 10,500 2015 2016 April 01 Balance b/d 9,500 Mar.31 Depreciation 1,000 Mar.31 Balance c/d 8,500 9,500 9,500 2016 2017 April 01 Balance b/d 8,500 Mar.31 Depreciation 1,000 Mar.31 Balance c/d 7,500 8,500 8,500 2017 2018 April 01 Balance b/d 7,500 Mar.31 Depreciation 1,000 Mar.31 Balance c/d 6,500 7,500 7,500 2018 2019 April 01 Balance b/d 6,500 Mar.31 Depreciation 1,000 Mar.31 Balance c/d 5,500 6,500 6,500 2019 2020 April 01 Balance b/d 5,500 Mar.31 Depreciation 1,000 Mar.31 Balance c/d 4,500 5,500 5,500 2021 2022 April 01 Balance b/d 4,500 Mar.31 Depreciation 1,000 Mar.31 Bank 600 Mar.31 Profit and Loss (Loss) 2,900 4,500 4,500

(i) Depreciation Expense for the year ended March 31, 2015 is Rs 1000

(ii) The Net Book Value of the asset on March 31, 2019 is Rs 5,500

(iii) Loss on Sale of the asset on March 31, 2022 is Rs 2,900

#### Question 8:

On 1st April, 2018, Star Ltd. purchased 5 machines for  ` 60,000 each. On 1st April, 2020, one of the machine was sold at a loss of  ` 8,000. On 1st July, 2021, second machine was sold at a loss of  ` 12,500. A new machine was purchased for  ` 1,00,000 on 1st October, 2021.
Prepare Machinery Account for 4 years, assuming accounts are closed on 31st March each year and depreciation is charged @ 10% per annum as per Straight Line Method.