Double Entry Book Keeping Ts Grewal 2021 for Class 11
Commerce Accountancy Chapter 15 -
Depreciation
Page No
15.42:
Question
5:
An asset was purchased for ` 10,500 on 1st
April, 2014. The scrap value was estimated 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.
Answer:
|
Asset Account |
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|
Dr. |
|
Cr. |
|||||||
|
Date |
Particulars |
J.F. |
Amount ( `) |
Date |
Particulars |
J.F. |
Amount ( `) |
||
|
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 |
||
|
2020 |
|
|
|
2021 |
|
|
|
||
|
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, 2021 is Rs 2,900
Page No
15.42:
Question
6:
On 1st April, 2017, Star Ltd. purchased 5 machines for ` 60,000 each. On 1st
April, 2019, one of the machine was sold at a loss of ` 8,000. On 1st July, 2020, second machine was sold at a loss of ` 12,500. A new
machine was purchased for ` 1,00,000 on 1st
October, 2020.
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.
Answer:
|
Dr. |
Machinery A/c |
Cr. |
|||||
|
Date |
Particulars |
Amount ( `) |
Date |
Particulars |
Amount ( `) |
||
|
2017 |
|
|
2018 |
|
|
||
|
April 01 |
To
Cash/Bank A/c (60,000 × 5) |
3,00,000 |
March 31 |
By
Depreciation A/c (3,00,000 × 10/100) |
30,000 |
||
|
|
|
|
March 31 |
By
balance c/d |
2,70,000 |
||
|
|
|
|
|
|
|
||
|
|
|
3,00,000 |
|
|
3,00,000 |
||
|
2018 |
|
|
2019 |
|
|
||
|
April 01 |
To
balance b/d |
2,70,000 |
March 31 |
By
Depreciation A/c (3,00,000 × 10/100) |
30,000 |
||
|
|
|
|
March 31 |
By
balance c/d |
2,40,000 |
||
|
|
|
|
|
|
|
||
|
|
|
2,70,000 |
|
|
2,70,000 |
||
|
2019 |
|
|
2019 |
|
|
||
|
April 01 |
To
balance b/d |
2,40,000 |
April 01 |
By
Bank A/c (WN1) |
40,000 |
||
|
|
|
|
April 01 |
By
Profit & Loss A/c (Loss on sale) |
8,000 |
||
|
|
|
|
2020 |
|
|
||
|
|
|
|
March 31 |
By
Depreciation A/c (2,40,000 × 10/100) |
24,000 |
||
|
|
|
|
|
(On
remaining machinery) |
|
||
|
|
|
|
March 31 |
By
balance c/d |
1,68,000 |
||
|
|
|
|
|
|
|
||
|
|
|
2,40,000 |
|
|
2,40,000 |
||
|
2020 |
|
|
2020 |
|
|
||
|
April 01 |
To
balance c/d |
1,68,000 |
July 1 |
By
Depreciation A/c (6,000 × 3/12) |
1,500 |
||
|
Oct.01 |
To
Cash/Bank A/c |
1,00,000 |
July 1 |
By
Bank A/c (WN2) |
28,000 |
||
|
|
|
|
July 1 |
By
Profit & Loss A/c (Loss on Sale) |
12,500 |
||
|
|
|
|
2021 |
|
|
||
|
|
|
|
March 31 |
By
Depreciation A/c (On remaining |
23,000 |
||
|
|
|
|
|
Machinery) |
|
||
|
|
|
|
|
[(1,80,000
× 10/100) + |
|
||
|
|
|
|
|
(1,00,000
× 10/100 × 6/12)] |
|
||
|
|
|
|
March 31 |
By balance c/d |
2,03,000 |
||
|
|
|
|
|
|
|
||
|
|
|
2,68,000 |
|
|
2,68,000 |
||
|
|
|
|
|
|
|
||
Working Notes:
|
1) Calculation of Sale proceeds from Machinery sold on
1st April, 2019 |
||
|
Book
Value of the Machine as on 1st April, 2019 |
= |
(Total
opening balance of Machinery on this date/5) |
|
|
= |
` (2,40,000/5) = ` 48,000 |
|
Loss
on Sale of Machinery |
= |
` 8,000 |
|
Sale proceeds from the Machinery |
= |
Book
Value of the Machine as on 1st April, 2019 – Loss on Sale |
|
|
= |
` (48,000 – 8,000) = ` 40,000 |
|
|
|
|
|
2)
Calculation of Sale proceeds from Machinery sold on 1st July 2020 |
||
|
Book
Value of the Machine as on 1st July, 2020 |
= |
[(Total
opening balance of Machinery on this date/4-Depreciation] |
|
|
= |
` [(1,68,000/4) – 1,500] = ` 40,500 |
|
Loss
on Sale of Machinery |
= |
` 12,500 |
|
Sale proceeds from the Machinery |
= |
Book
Value of the Machine as on 1st July, 2020 – Loss on Sale |
|
|
= |
` (40,500 – 12,500) = ` 28,000 |
Page No
15.42:
Question
7:
On 1st April, 2017, A Ltd. purchased a machine for
` 2,40,000 and spent ` 10,000 on its
erection. On 1st October, 2017 an additional machinery costing ` 1,00,000 was
purchased. On 1st October, 2019, the machine purchased on 1st April, 2017 was
sold for ` 1,43,000 and on the
same date, a new machine was purchased at cost of ` 2,00,000.
Show the Machinery Account for the first four financial years after charging
Depreciation at 5% p.a. by the Straight Line Method.
Answer:
Machinery Account
|
Dr. |
|
Cr. |
||||||||||
|
Date |
Particulars |
J.F. |
Amount ( `) |
Date |
Particulars |
J.F. |
Amount ( `) |
|||||
|
2017 |
|
|
|
2018 |
|
|
|
|||||
|
April 01 |
Bank (M1) |
|
2,50,000 |
March 31 |
Depreciation |
|
|
|||||
|
Oct. 01 |
Bank (M2) |
|
1,00,000 |
|
M1 |
12,500 |
|
|
||||
|
|
|
|
|
|
M2 (6 Months) |
2,500 |
|
15,000 |
||||
|
|
|
|
|
March 31 |
Balance c/d |
|
|
|||||
|
|
|
|
|
|
M1 |
2,37,500 |
|
|
||||
|
|
|
|
|
|
M2 |
97,500 |
|
3,35,000 |
||||
|
|
|
|
3,50,000 |
|
|
|
3,50,000 |
|||||
|
2018 |
|
|
|
2019 |
|
|
|
|||||
|
April 01 |
Balance b/d |
|
|
March 31 |
Depreciation |
|
|
|||||
|
|
M1 |
2,37,500 |
|
|
|
M1 |
12,500 |
|
|
|||
|
|
M2 |
97,500 |
|
3,35,000 |
|
M2 |
5,000 |
|
17,500 |
|||
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
March 31 |
Balance c/d |
|
|
|||||
|
|
|
|
|
|
M1 |
2,25,000 |
|
|
||||
|
|
|
|
|
|
M2 |
92,500 |
|
3,17,500 |
||||
|
|
|
|
3,35,000 |
|
|
|
3,35,000 |
|||||
|
2019 |
|
|
|
2020 |
|
|
|
|||||
|
April 01 |
Balance b/d |
|
|
Oct. 01 |
Depreciation (for 6 months) |
|
6,250 |
|||||
|
|
M1 |
2,25,000 |
|
|
Oct. 01 |
Bank (M1 sold) |
|
1,43,000 |
||||
|
|
M2 |
92,500 |
|
3,17,500 |
Oct. 01 |
Profit and Loss (loss on sale) |
|
75,750 |
||||
|
|
|
|
|
|
2019 |
|
|
|
||||
|
July 01 |
Bank (M3) |
|
2,00,000 |
March 31 |
Depreciation |
|
|
|||||
|
|
|
|
|
|
M2 |
5,000 |
|
|
||||
|
|
|
|
|
|
M3 (for 6 months) |
5,000 |
|
10,000 |
||||
|
|
|
|
|
March 31 |
Balance c/d |
|
|
|||||
|
|
|
|
|
|
M2 |
87,500 |
|
|
||||
|
|
|
|
|
|
M3 |
1,95,000 |
|
2,82,500 |
||||
|
|
|
|
5,17,500 |
|
|
|
5,17,500 |
|||||
|
2020 |
|
|
|
2021 |
|
|
|
|||||
|
April 01 |
Balance b/d |
|
|
March 31 |
Depreciation |
|
|
|||||
|
|
M2 |
87,500 |
|
|
|
M2 |
5,000 |
|
|
|||
|
|
M3 |
1,95,000 |
|
2,82,500 |
|
M3 |
10,000 |
|
15,000 |
|||
|
|
|
|
|
March 31 |
Balance c/d |
|
|
|||||
|
|
|
|
|
|
M2 |
82,500 |
|
|
||||
|
|
|
|
|
|
M3 |
1,85,000 |
|
2,67,500 |
||||
|
|
|
|
2,82,500 |
|
|
|
2,82,500 |
|||||
|
|
|
|
|
|
|
|
|
|||||
Working Notes:
1. Calculation of Deprecation
Machine 1= 2,50,000×5/100= `12,500 p.a.
Machine 2= 1,00,000×5/100= `5,000 p.a.
Machine 3= 2,00,000×4/100= `10,000 p.a.
2. Calculation of profit or loss on sale of Machine 1
|
Particulars |
Amount ( `) |
|
Book Value on April 01, 2019 |
2,25,000 |
|
Less: Deprecation for six month |
(6,250) |
|
Book Value on Oct. 01, 2019 |
2,18,750 |
|
Less: Sale Proceeds |
(1,43,000) |
|
Loss on Sale of Machine |
75,750 |
Page No
15.43:
Question
8:
A Van was purchased on 1st April, 2018 for ` 60,000 and ` 5,000 was spent on its repair and registration. On 1st October, 2019 another van was purchased for ` 70,000. On 1st April, 2020, the first van purchased on 1st April, 2018 was sold for ` 45,000 and a new van costing ` 1,70,000 was purchased on the same date. Show the Van Account from 2018-17 to 2020-19 on the basis of Straight Line Method, if the rate of Depreciation charged is 10% p.a. Assume that books are closed on 31st March every year.
Answer:
|
Van Account |
|
|||||||||||
|
Dr. |
|
Cr. |
||||||||||
|
Date |
Particulars |
J.F. |
Amount ( `) |
Date |
Particulars |
J.F. |
Amount ( `) |
|
||||
|
2018 |
|
|
|
2019 |
|
|
|
|
||||
|
April 01 |
Bank (I) |
|
65,000 |
March 31 |
Depreciation (I) |
|
6,500 |
|
||||
|
|
|
|
|
March 31 |
Balance c/d (I) |
|
58,500 |
|
||||
|
|
|
|
65,000 |
|
|
|
65,000 |
|
||||
|
2019 |
|
|
|
2020 |
|
|
|
|
||||
|
April 01 |
Balance b/d (I) |
|
58,500 |
March 31 |
Depreciation |
|
|
|
||||
|
Oct. 01 |
Bank (II) |
|
70,000 |
|
(I) |
6,500 |
|
|
|
|||
|
|
|
|
|
|
(II) (for 6 month) |
3,500 |
|
10,000 |
|
|||
|
|
|
|
|
March 31 |
Balance c/d |
|
|
|
||||
|
|
|
|
|
|
(I) |
52,000 |
|
|
|
|||
|
|
|
|
|
|
(II) |
66,500 |
|
1,18,500 |
|
|||
|
|
|
|
1,28,500 |
|
|
|
1,28,500 |
|
||||
|
2020 |
|
|
|
2021 |
|
|
|
|
||||
|
April 01 |
Balance b/d |
|
|
April 01 |
Bank (I) |
|
45,000 |
|
||||
|
|
(I) |
52,000 |
|
|
April 01 |
Profit and Loss (Loss on Sale) |
|
7,000 |
|
|||
|
|
|
|
|
|
2020 |
|
|
|
|
|||
|
|
(II) |
66,500 |
|
1,18,500 |
March 31 |
Depreciation |
|
|
|
|||
|
April 01 |
Bank (III) |
|
1,70,000 |
|
(II) |
7,000 |
|
|
|
|||
|
|
|
|
|
|
(III) |
17,000 |
|
24,000 |
|
|||
|
|
|
|
|
March 31 |
Balance c/d |
|
|
|
||||
|
|
|
|
|
|
(II) |
59,500 |
|
|
|
|||
|
|
|
|
|
|
(III) |
1,53,000 |
|
2,12,500 |
|
|||
|
|
|
|
2,88,500 |
|
|
|
2,88,500 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Working Notes
1. Calculation of Annual Depreciation
Maruti Van (1) = 65,000×10/100= `6,500
Maruti Van (1I) = 70,000×10/100= `7,000
Maruti Van (1II) =1,70,000×10/100= `17,000
2. Calculation of
profit or loss on sale of Van (I)
|
Particulars |
Amount ( `) |
|
Book Value on
Apr. 01, 2020 |
52,000 |
|
Less: Sale of Van |
(45,000) |
|
Loss on Sale of Van |
7,000 |