Double Entry Book Keeping Ts
Grewal 2021 for Class 11 Commerce Accountancy
Chapter 15 - Depreciation
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Page No
15.41:
Question
1:
Calculate the Amount of annual Depreciation and Rate of
Depreciation under Straight Line Method (SLM) from the following:
Purchased a second-hand machine for ` 96,000, spent ` 24,000 on its
cartage, repairs and installation, estimated useful life of machine 4 years.
Estimated residual value ` 72,000.
Answer:
Amount of Annual Depreciation=Cost of Machine−Scrap Value of Machine Life in Years
=1,20,000−72,000/4=Rs 12,000
Rate of Depreciation=Amount of DepreciationCost of Machine×100
=12,000/1,20,000×100=10%p.a.
Page No
15.41:
Question
2:
On
1st April, 2018, X Ltd. purchased a machine costing ` 4,00,000 and spent ` 50,000 on its installation. The estimated
life of the machinery is 10 years, after which its residual value will be `50,000 only. Find the amount of annual depreciation according to the
Fixed Instalment Method and prepare Machinery Account for the first three years.
The books are closed on 31st March every year.
Answer:
|
Book of X Ltd. Machinery Account |
|||||||||
|
Dr. |
|
Cr. |
|||||||
|
Date |
Particulars |
J.F. |
Amount ( `) |
Date |
Particulars |
J.F. |
Amount ( `) |
||
|
2018 |
|
|
|
2019 |
|
|
|
||
|
April 01 |
Bank |
|
4,00,000 |
Mar.31 |
Depreciation |
|
40,000 |
||
|
April 01 |
Bank (Erection Expense) |
|
50,000 |
|
Balance c/d |
|
4,10,000 |
||
|
|
|
|
4,50,000 |
|
|
|
4,50,000 |
||
|
2019 |
|
|
|
2020 |
|
|
|
||
|
April 01 |
Balance b/d |
|
4,10,000 |
Mar.31 |
Depreciation |
|
40,000 |
||
|
|
|
|
|
|
Balance c/d |
|
3,70,000 |
||
|
|
|
|
4,10,000 |
|
|
|
4,10,000 |
||
|
2020 |
|
|
|
2021 |
|
|
|
||
|
April 01 |
Balance b/d |
|
3,70,000 |
Mar.31 |
Depreciation |
|
40,000 |
||
|
|
|
|
|
|
Balance c/d |
|
3,30,000 |
||
|
|
|
|
3,70,000 |
|
|
|
3,70,000 |
||
|
|
|
|
|
|
|
|
|
||
Calculation of Depreciation:
Depreciation p.a. = 4,00,000+50,000-50,000(Scrap Value)10 years
= ` 40,000 p.a.
Page No
15.42:
Question
3:
On 1st April, 2017, 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 2018 and 1st October, 2020 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.
Answer:
|
Furniture Account |
|||||||||||
|
Dr. |
|
Cr. |
|||||||||
|
Date |
Particulars |
J.F. |
Amount ( `) |
Date |
Particulars |
J.F. |
Amount ( `) |
||||
|
2017 |
|
|
|
2018 |
|
|
|
||||
|
April 01 |
Bank (F1) |
|
55,000 |
March 31 |
Depreciation (F1) |
|
5,000 |
||||
|
|
|
|
|
March 31 |
Balance c/d (F1) |
|
50,000 |
||||
|
|
|
|
55,000 |
|
|
|
55,000 |
||||
|
2018 |
|
|
|
2019 |
|
|
|
||||
|
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 |
||||
|
2019 |
|
|
|
2020 |
|
|
|
||||
|
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 |
||||
|
2020 |
|
|
|
2021 |
|
|
|
||||
|
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
Page No
15.42:
Question
4:
From the following transactions of a concern, prepare the Machinery Account for the year ended 31st March, 2021:
|
1st
April, 2020 |
: |
Purchased
a second-hand machinery for ` 40,000 |
|
1st
April, 2020 |
: |
Spent
`10,000
on repairs for making it serviceable. |
|
30th
September, 2020 |
: |
Purchased
additional new machinery for ` 20,000. |
|
31st
December, 2020 |
: |
Repairs
and renewal of machinery ` 3,000. |
|
31st
March, 2021 |
: |
Depreciate
the machinery at 10% p.a. |
Answer:
|
Machinery Account |
|||||||||||
|
Dr. |
|
Cr. |
|||||||||
|
Date |
Particulars |
J.F. |
Amount ( `) |
Date |
Particular |
J.F. |
Amount ( `) |
||||
|
2020 |
|
|
|
2021 |
|
|
|
||||
|
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, 2020 will not be recorded in Machinery Account because, this repair was made after putting the Machinery into use.